Earnings Call Transcript - XNSE:EIEL 2026-11-06

Operator

Ladies and gentlemen, good day and welcome to the Enviro Infra Engineers Ltd. Q2 and H1 FY27 conference call. Today we have with us Mr. Sanjay Jain, Chairman and Mr. Manish Jain, Managing Director of Enviro Infra Engineers Ltd. 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 the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanjay Jain for his opening remarks. Thank you and over to you, sir.

Sanjay Jain, Chairman

Thank you. Good afternoon, everyone. Thank you for joining us today for EnviroInfoEngineers Limited Q2 and H1 FY27 Earning Conference Call. On behalf of the entire EnviroInfoEngineers family, I would like to extend my warm wishes to all our investors. I wish you and your family a very happy Diwali. Joining me today are Mr. Manish Jain, our Managing Director, and our Investor Relations Team from Ad Factor PR. We have shared our financial results and earnings presentation, and I hope you have had an opportunity to review them. The first half of the FY27 has been an important period for environmental engineers as we continue to strengthen our position in the water and wastewater infrastructure sector, while expanding our presence across renewable energy and other sustainable infrastructure segments. Our long-term objective is to build On our established engineering and execution capabilities and evolve into a diversified engineering and infrastructure company. India continues to witness significant investment in water management, great water treatment, and clean energy infrastructure. Government initiatives such as Namami Ganga and Amrush, along with the increasing focus on water reuse and environmental sustainability, are creating meaningful opportunities for companies with strong technical expertise and execution capabilities. At EnviroIncra, our water and wastewater business continues to remain the foundation of our observation. Over the year, we have developed strong capabilities across the design, construction, commissioning, operation, and maintenance of complex water and wastewater treatment-inspired structures. Our expertise is when serious treatment plants, serious network, common aplomb treatment plants, and advanced wastewater treatment solution including zero-liquid discharge and treated water reuse. During the first time, we further extended our M-Portfolio, with the two new projects under the Namami Ganga program in Varanathis, awarded by Uttar Pradesh Jannega. These projects include a 45 MLD serious treatment plant at Pandit Deen Deyal, Upadhyay Nagar, valued at 126.78 crore, and a 60 MLD serious treatment plant at Lohota. Valued at 130.14 crores, together these projects have a combined value of approximately 257 crores, excluding GST and includes 15 years of O&M. With this addition, our HEMP portfolio now comprises 5 projects. Our execution capabilities are reflected in our growing portfolio of water and wastewater treatment projects across India. We have completed 58 water and wastewater projects with a cumulative treatment capacity of 1,018 MLD built today demonstrating our ability to undertake complex treatment infrastructure projects. Alongside our core business, we have continued to make significant progress in expanding our renewable energy platform. Our diversification into renewable energy is a natural extension of our existing engineering and project execution capabilities, enabling us to participate in opportunities across solar, wind, and battery energy storage systems. The acquisition of its controlling stake in Pio Burja Ltd earlier this year marked an important milestone in this journey. The acquisition has strengthened our capabilities in the Wend EPC segment, and provided us with access to an experienced execution team and an established project portfolio. During September, Shio Gurja received a letter of intent. from Tata Power Renewable Energy Limited for EPC Tanki water relating to the 180 MW NPPC wind project at Parli, Maharashtra. The project is valued approximately 190 crore excluding GSP and includes wind turbine foundation, balance of plant infrastructure, and associated transmission work. It is scheduled for completion by March 2027. Subsequently, in October 2026, Kyo Burjaya received another letter of intent worth 228 crore excluding GST from AREE Energy LLP for EPC worth related to the 100 MW Ajani wind power project in Latur, Maharashtra. Together, these two in EPC order represent approximately 418 crore in project value, excluding GST, and further extend our execution pipeline across FY27 and early FY28. These developments demonstrate the increasing scale of our renewable energy operations and our ability to participate in larger infrastructure projects. Importantly, renewable energy contributes approximately 29% of our consolidated revenue during H1 FY27, reflecting the growing contribution from our diversified business portfolio. As on date, our diversified order book expanded approximately. 6,778 crores comprising 3,439 crores from water and wastewater infrastructure and 3,340 crores from renewable energy. This provides us with healthy execution visibility across our businesses. Beyond the wind, we continue to strengthen our presence across solar and battery energy storage system, which we believe will play an increasing important role in India's evolving energy infrastructure. Looking ahead, our priorities remain focused on strengthening our core water and wastewater infrastructure business. Through timely execution, advanced treatment capabilities, and long-term O&M opportunities, while scaling our renewable energy platform across solar, wind, and energy storage, we remain committed to disciplined execution operational efficiency and prudent capital allocation as we convert our growing order book into sustainable revenue and profitability. We believe the combination of our established water infrastructure business and expanding renewable energy capabilities provide us with a strong foundation to participate in India's growing sustainable infrastructure requirements and create long-term value for our stakeholders. With that, I would now like to hand over the call to Mr. Manish Jain. Who will take you through our key operational development and financial performance for the quarter. Thank you, and over to you, Mr. Manish.

Manish Jain, Other

Thank you, Sanjay, sir, and good afternoon to you all.

Manish Jain, Other

I will take you through our operational performance, order book composition, and financial results for the second quarter and first half of FY27, followed by our priorities for the remainder of the financial years. Starting with our order book, MJF has already highlighted our overall order book position. I would like to provide some additional details on its composition and execution visibility. Within the water and wastewater segment, our ETC order book stood at approximately 2,106 crore, while our hemp portfolio accounted for. On the renewable energy side, our execution order book comprises approximately Rs.111 crore in solar, 1,100 crore in bed, and 1054 crore in build projects. The income generation from ITP projects which is over a period of 15 to 25 years is to give 956 crore along with 109 maintenance contracts of the optimal renewable order book. For the second quarter of FY27, on a standalone basis, the revenue for the quarter is stood at Rs. 267.13 crore, EBITDA stood at Rs. 65.13 crore, and PET on standalone basis stood at Rs. 36.87 crore. The EBITDA margin for the quarter on standalone basis is 24.38% and PET margin is 13.8%. Our consolidated revenue from operations to that to be 63.8 crore compared with 227.3 crore in Q2 FY26. We are just seeing a year-on-year growth of 60%. On a sequential basis, revenue increased from 359.2 crore in Q1 FY27. On consolidated basis, EBITDA excluding other income is to that to be 74.9 crore. Compared with rupees 64.9 crore in the corresponding quarter last year, registering a growth of 16.3%. Our EBITDA margin stood at 20.58% compared with 28.56% in Q2 FY26 and

Manish Jain, Other

21.07% in Q1 FY27. Profit after tax for the quarter stood at 39.5 crore

Manish Jain, Other

compared with Rubik 49.5 crore in q2 f8 indices. The moderation in profitability reflects the moment in operating margins along with higher depreciation and finance costs.

Manish Jain, Other

Basic earning per share is stored at 2.36. For the first half of FY27,

Manish Jain, Other

consolidated revenue from operations is stored at Rs. 723 crore compared with Rs. 458.3 crore in H1 FY26. Registring a growth of 54.4% year-on-year basis. EBITDA excluding other income increase is 16.6% to 150.5 crore compared with 129.2 crore in the corresponding period last year. The EBITDA margin for the first half is today 20.82%. Profit after tax is stood at 2p is 84.7 crore compared with 92 crore in H1 FY26, while the basic earnings per share is stood at 4.63. The moderation in EBITDA margin at console levels are attributed to some accounting and pay on account of interest cost on the payments to be made at a later stage. The profitability from IPP projects shall get reflected once the projects are completed and it starts generating IPP revenues. Further, from Q3 and onward, the scale of EPC of death and winch projects shall increase substantially, which shall result in the improved profitability for the renewables and for the company as well. Overall, the first half reflects a strong revenue growth in an increasing scale of operations across our businesses. While the margin profile has moderated, our emphasis remains on cost management, project execution efficiency, and sustainable profitability. Coming to our balance sheet and working capital, efficient capital management means a key important focus area. Particularly, as we undertake projects with different execution timelines and funding requirements. As of September 26, our consolidated rate receivables stood at approximately 321.8 crore compared with 165.3 crore as of March 2026. At the same time, our total borrowing stood at approximately 321.9 crore compared with 422.3 crore at the end of previous financial year. We continue to work towards timely certification of project milestones, improving, improved billing in collection and optimizing our working capital requirements. Our objective remains to ensure that the growth in our operations is accompanied by disciplined capital utilization and improved cash flow generation. Looking ahead to the second half of effort 27. Our immediate priority will be to accelerate execution across existing water and wastewater treatment projects, progressing in the HEM portfolio, and extending our long-term operation maintenance. Alongside this, we will focus on the timely execution of our renewable energy projects, particularly across Bass and Wind ETC, while managing procurement commitments and technical requirements efficiently. We will continue to pursue new opportunities selectively with an emphasis on the project quality, execution capabilities, and profitability. Our focus remains on converting our existing project pipeline into sustainable revenue growth while spending our operating and financial performance. With that, I would like to thank all our investors and analysts for their continued interest in EnviroInfra Engineers Limited.

Manish Jain, Other

We can now open the floor for questions.

Operator

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Nitin Asopa with OM Investment. Please go ahead.

Manish Jain, Other

Good afternoon, board.

Manish Jain, Other

Good afternoon. My name is Nitin. I'd like to ask a question regarding the company's long-term growth opportunities. Given the rapid growth of semiconductor manufacturing and data centers in India, both of which require advanced water treatment solutions, is EnviroInfra engineers evaluating an expansion into high-period in ultra-pure water treatment systems

Atul Kumar, Analyst — Individual Investor

for semiconductor fabrication facilities and advanced water recycling solutions for data centers? Does the company see these sectors as potential growth opportunities, and are there any plans to develop the necessary technological capabilities, strategic partnerships,

Manish Jain, Other

or collaborations to enter these specialized markets? Thank you. We think company is already into the ZLD segment. At present, we are executing one of the ZLD projects which is for a textile complex for MIDC at HL Karanji. So if we look forward, so basically ZLD is one of the key areas where the company will continue to focus. Along with RELD, reuse of wastewater from the serious treatment plants is gaining a lot of momentum since water is very scarce and availability of water to various industries. It is a mandated requirement right now to support the industry. So reuse is one of the key focus areas. At present, the company is not available in the ultra pure water segment. We will continue to develop our execution capabilities and one point of time we look forward to anything in that segment, but presently we would focus on the ZLD use of water from the species treatment plant. We would like to focus on the decalination project as well. So this is how we will continue to expand our journey across entire spectrum of water and wastewater treatment and at some point of time when we are comfortable enough then definitely we look forward to entering the UPW as well. But at least as of now UPW we are not available. Advanced wastewater treatment system for a data center that is also means that capability as we are going to the RLDA system so that is there. So, apart from UPW, we are well aligned and we are moving into these type of projects. Thank you.

Operator

Thank you. The next question comes from the line of Chetrika Deshpande with Capital Advisor. Please go ahead.

Chetrika Deshpande, Analyst — Capital Advisor

Hi, sir. Good afternoon and thank you for the opportunity. So, my first question is, has there been any improvement in fund release under AMRUS, Namami Ganga, and other government projects?

Manish Jain, Other

There are no challenges with respect

Manish Jain, Other

to the release of funds under Namami Ganga. If I say Namami Ganga, there are two types of projects. One is N-project and second is EPC. Under HEM projects, the funds are already parked in the dedicated S-Pro accounts. So, release of funds are never a challenge when we are executing a HEM project under Namami Ganga tools. The second one comes the EPC under Namami Ganga. So the availability of fund again is not a challenge under NMCG. So there is a working capital cycle of them that is not also very fresh. It can be somewhere around 60 days time. So Namami Ganga projects, the fund relief or the working capital cycle not gets bloated. Now coming to the second aspect, Amrut. Amrut, it is off and on, I will say, and it is statewide. In some states, the funds are getting released smoothly. In some states, there are some of the issues. The issues may pertain to the local department as well. There are some approvals which are pending with respect to the usage of funds or their signatures, signatories are not available. So that type of issues can be there. Other way round, the funds are being made available, even Amrush scheme does well. So, we understand that working capital cycle gets a bit bloated in Amrush projects, but funds are available and the projects are moving on.

Chetrika Deshpande, Analyst — Capital Advisor

Okay, answer my next question is, what is company's strategy for expanding its presence in BESS segment?

Manish Jain, Other

In the BESS segment presently, there is an order book

Manish Jain, Other

of 930 megawatt hour from NTPC. We do have one project, which is an IPP project from Bihar, which we have acquired. So right now we are executing these two projects. To our understanding, a major chunk of these projects is expected to be completed by June. So, we look forward to a good execution in the best projects and then definitely look forward to further increasing our order book in best segment both

Manish Jain, Other

under EPC as well as IPP if a good project is available.

Chetrika Deshpande, Analyst — Capital Advisor

Okay, sir. That answers my question. All the very best and thank you.

Operator

Thank you. The next question comes from the line of Atul Kumar, an individual investor. Please go ahead.

Atul Kumar, Analyst — Individual Investor

Hello. Good afternoon, sir. Thank you for the opportunity. Sir, my question is related to the margin decline that we have seen in this quarter and also H1. So, compared to the previous year, we have seen a decline of almost 800 to 900 PPS. So, what has been the main reason for this decline, sir? And also, whenever checking the results, there is an item in EML which says other construction and operating expenses. Year-on-year, that has increased from 46 crore in last year to 178 crore. So that's... That's a quite increase. So I wanted to know what exactly is this cost item, and also if you can give an overall commentary on why we have seen margin declining from 27%, 28% to 20% levels.

Manish Jain, Other

Atul, if you see to our guidance for the current

Manish Jain, Other

financial year, we had reduced the EBITDA margin guidance in the water and waste water treatment segment to somewhere around 21%, because on account of the war which is continuing in West Asia and this Middle East, and because of which the input pricing has increased substantially. If you see to the standalone results of the company, basically we have done somewhere around 264 crore in the current quarter and our EBITDA margin is spent at 24% and our FAT is also somewhere around 14%. As we see into the results for on a standalone basis, to my understanding, we are well sorted and we are maintaining the guidance, we are well above our guidance level as well. Now coming to the renewable segment and on the console, balance sheet and profit and loss. Basically, if you could have, you could just recall the speech, wherein I mentioned, there are some accounting entries, because there has been an acquisition of Suyo Gurja, which is at 311 crores. First installment or first tranche of rupees 111 crore is what has been paid. And rest balance 200 crores that will go in next two years. So there has been an implication of some interest costs which has been taken as an expense. This is one of the costs which has got added. So it is again a vocationary. Second one is as we are executing the ETC of the IPP projects which we are having in hand, the profits. Are required to be reversed in these IPT projects. Reason being, since it is a group company, renewable is basically the parent company and the asset is passed in the SPV. So as the parent company is doing the EPC, if there are any profits at the console level, that margins are required to be reversed. With these accounting entries and the audits, yes, on the top, on overall basis,

Manish Jain, Other

it looks the profitability is going down. Then if you will see the revenue

Manish Jain, Other

have increased almost 60%, EBITDA has increased to around 20%, and then What we can understand is there has been an increase in the finance cost depreciation. Depreciation because the IPP and HEM projects what we are doing. So there is a higher accounting for the depreciation. So that is as a percentage of sales, employee cost, finance cost, and depreciation have definitely increased for the first half. But as the revenue growth will further improve in Q3 and Q4, we expect the profitability in itself that will improve substantially and it will improve the margin profile as well.

Atul Kumar, Analyst — Individual Investor

Okay. Okay. So basically, my main question was, so I understand the finance cost depreciation. Those have increased in line of, let's say, increase in the revenue. My question was on, there is an item, sir, other construction and operating expenses. That is 178 crore for Q2. So could you explain, like, is that part of the payment that we have done to Sujuk Urcha, like 111 crore, you're saying? No, no. These are the direct

Manish Jain, Other

cost of which includes all the expenses which are related to the execution of the project. One is the purchase cost and second is other construction and operation cost. So basically all the Manpower cost, the wages, the civil construction, this labor cost. So all these costs, job works, these all are taken as a part of this other construction and operating expenses. I will suggest if you will see the purchase cost along with this other construction and operating cost. So if you will formulate these two. And if you will compare these costs, I think that will make more sense and then the actual changes what are happening in the cost of production, that will make sense.

Atul Kumar, Analyst — Individual Investor

Okay. Okay, sir. It's just a request, sir, if possible. So, basically, I'm saying like out of total main expenses of 248 crore, 128 crore we are saying is other cost. I think if we can further break it down, it will be easier for investors to understand that where this other is going on since the value is too high. Okay. And my follow-up question would be, sir, so since you're saying the margin is in line of what we had recommended, so for the longer term, if we have to see at consolidated level, both since we have like 50-50% order book of renewable and water now, so what is the margin profile that we should expect going ahead? Should it be like 20-22% or higher or lower?

Manish Jain, Other

Uh, the EBITDA margin profile can be expected to be somewhere around 19 to 20%. When you compare the standalone and the console pet levels, so on a standalone basis, the pet is 37 crore. On console basis, the profitability is 39.5 crore. So, the mean point, the profitability from renewable, basically, it will get transpired as the EPC component of renewable from best and then that will increase. So, there is a substantial uptick which is expected. There has not been a moment or a substantial moment in the EPC execution of these projects till now. This will increase a lot and then the profitability from EPC will come. While we are executing ITP, so profitability doesn't come during the execution. It will come when the projects get executed and ITP income starts getting generated. So the profitability from renewable, there should be a remarkable increase in Q3 and Q4 as we expect. Overall, if I say. The guidance has been 21% EBITDA margins for water and wastewater treatment segment. Somewhere between 15 to 18% EBITDA levels for renewable. On a console level, we should be somewhere around 19%. So this is how the profile should move in further quarters.

Atul Kumar, Analyst — Individual Investor

Yeah, that's, I think, very helpful, sir. So, thank you. One last question that I have.

Operator

Sorry to interrupt, Atul. I would request you to rejoin the queue for more questions. Thank you. The next question comes from the line of Manish Choghare with Keynote Capital. Please go ahead.

Manish Choghare, Analyst — Keynote Capital

Namaste, Manish. So, I just wanted to know that our Q4 F526 is also affected by... Two projects from Bangalore, and it was expected to be commissioned in the Q2 FY27. So what is the update on that? The second question is, how do we look at a consolidated FY27 number? Will you stick to our guidance of sales of 2000 code, and what could be the data and data we are expecting?

Manish Jain, Other

Regarding the two Bangalore projects, the total value of which was around 220 crores. Both the projects are now under execution and are moving smoothly. We are maintaining the timelines and we expect to complete projects well ahead of schedule. So these projects are now on and there is no issue with respect to the execution in both projects. Now coming to our guidance for FY27, we have been able to meet the guidance for the first two quarters as far as the revenues are concerned. So we have achieved a top line of 700 crore and this was primarily the guidance from outside as well. Now as we move forward, so Our guidance remains intact at 2,000 crore to be the total same turnover for the current financial year. So, balance 1,300 crore is what we expect we should be in a position to do in Q3 and Q4. The bottom line also is expected to be somewhere in the range of around 240 to 250 crores. So, our guidance remains intact for the financial year. We maintain our guidance, there is no change and as such, if we talk current financial year, the order book is already there in our hands and what guidance we are giving is based on the current order book.

Manish Choghare, Analyst — Keynote Capital

When are we expecting to be OCF positive post Q3?

Manish Jain, Other

We look forward to be OCS positive by Q4. I don't see any chances. If you, again, if I give a number basically for the current in this H1, there is an increase in the service concessionaire agreement receivables to the tune of 57 crore. This amount has to come over a period of 15 years. So this is one which We take this OCF to negative figures. Trade payables have got reduced from 93 days to 63 days. So the total outgo on that account has been to the tune of 102 crores. So if we can just, maybe it's a reconsideration. If I would have slowed down on the payments for the trade receivables, I could have turned OCF positive. As such, operations in the company are smooth. We are moving at a rapid pace. The execution of the projects are well in control. We are executing projects well ahead of time. So that way we still are in a confident position. OCS positive definitely on paper as it should look like. We expect that Q4 onwards we should be OCS positive.

Operator

The next question comes from the line of Sudeep Anand with Systematics Group. Please go ahead.

Sudeep Anand, Analyst — Systematics Group

Thank you, sir, and wish you all a very happy event, and happy Diwali. A few questions. So, if you look at our balance sheet, our debt level has actually, gross debt has gone up significantly, consolidated from 422 crores to 744 crores. And based on the order book, which we have around 6700 crores, what is the peak debt level that we are looking at, and when it should reach out?

Manish Jain, Other

Good afternoon, Sudeepji, and happy Zanthaya and happy Zanthaya to you as well. First of all, if we look into the debt to equity, so even at present, our debt to equity is somewhere around 0.53. So that says we are sitting on a comfortable level. Still, if we compare it from Q1, it was somewhere around 423 crores, which has now increased to 700 crores. So, we can attribute it to some of the hemp projects which we are executing. Two hemp projects which we were executing in Enviros, it was a Mathra project, where we have achieved the construction completion now. The second project is Saharanpur, wherein we are moving for the fourth milestone completion. So, there is an increase in the town loan due to this. There are IPP projects as well in the renewable due to which the term loan has increased, but there is an asset which is available from which the income accruing in the future will take up the interest for those particular projects. So that means, term loan definitely is expected to increase, but it will increase moderately. Thanks, Glenn, Esther. There is an increase in the short-term loan level, but we expect that as the cash flow cycle will get eased out, so these, I will say the trades payables through which we make payment to our MSME vendors, the CC limits of the WCDL, that will go down. I can look forward to this number not getting bloated or too much, but to give exact number is not possible. So if I say my, this financial year should get close at a debt to equity level, not more than 0.6.

Sudeep Anand, Analyst — Systematics Group

Okay. And so similarly with the receivables and UBR, do you think that by FI27 it should considerably come down or we should look at a similar kind of level by FI27, by March 27th?

Manish Jain, Other

The UVR which was there in our balance sheet because of antigenism projects. It has now reduced significantly. And what I can say is now it is not even in three digits, somewhere around the projects of this MP Janigam and Argarjal, which we were executing. So can be somewhere around 100 crore or maybe less than 100 crore now. So these projects are moving on a continuous basis. So by March, we expect that if we shall almost be nil. In the UDR, negligible amount means some smaller ones can be there. So this is one. We expect a significant improvement in the working capital cycle in other projects. So a significant reduction is possible. But one thing which I would like to answer is The value may remain at a similar level of maybe somewhere around 600 crore or so, but as a percentage of the sales or in terms of UBR days, we do expect that it should come down substantially because as the sales will increase, that number may not be going down significantly, but yes, UBR days should definitely come down. So we are at a peak of it. And in comparison to Q1, in comparison to Q1, it has come down.

Sudeep Anand, Analyst — Systematics Group

Okay, that's it. So just one last question. So if you look at the last six to nine months, most of the order has come in the renewable segment. So should we consider like strategically we are moving towards the renewable and water where the contribution in the total order will keep declining? Is it so? Or it's just a matter of time and going forward. How should we look at, say, by FA28, what contribution from water you are expecting to the total order book?

Manish Jain, Other

But so there is no chance of getting shifted from the parent water and wastewater treatment business, which is the core and we have been continuing with it for the past 35 years and we don't see that

Sanjay Jain, Chairman

there will be any decline in the opportunity in this particular segment.

Manish Jain, Other

Now coming to the order book in the past five, six months, basically there has been some increase in the competition. We have not lowered our profitability guidance from the projects while we are bidding. Now if we have to maintain that profit profile, so the type of projects, the maybe a single ticket size project. The demands to wastewater treatment systems, ZLD projects, reuse. So we are focusing more on that side. Since our order book is already very healthy, last year when we were bidding, there was a thought process that The order book was not there with the company, so we are well-sorted at least for the current financial year, and we look forward to quality order book, and we can wait for certain time before we get some good projects. We are not interested in lowering the profitability guidance.

Manish Jain, Other

That's it, Krishna.

Sudeep Anand, Analyst — Systematics Group

Thank you so much and all the best, sir.

Operator

Thanks a lot. The next question comes from the line of Juzer Darwala with Avaya Advisor. Please go ahead.

Juzer Darwala, Analyst — Avaya Advisor

Sir, am I audible to you, sir?

Operator

Yeah, yeah, please go.

Juzer Darwala, Analyst — Avaya Advisor

Yeah. Happy Dantir, sir. So, my first question is, what is the company's order inflow target for FY27, and how is the current project pipeline shaping up, sir?

Manish Jain, Other

The order guidance for current financial year in the water and wastewater treatment segment was 2,500 crores.

Juzer Darwala, Analyst — Avaya Advisor

Okay.

Manish Jain, Other

The order book which we have got in the current financial year, we have got 200 or 250 odd crores. So balance order pipeline is what is still to be filled or these orders we are expecting. There are some really very good projects which are coming, like the hand projects which are coming right now in Delhi, some EPP projects coming in UP, a number of projects in Jharkhand, Dihar, NMP, and Dhanakta. So, across all states under Namami Ganga, where these river Ganga or Ganga tributes are there. There is one more scheme from the government. So there is one more scheme which I was telling, it is Urban Challenge Fund. Apart from Amros, the projects are also coming under UCS as well. So we look forward to very strong pipeline coming in, in the future as well. So the order, we stick to our guidance once again, that this order book of balance order book of around 2250 crore, we should get in the current financial year itself. Apart from this, there are some overseas projects for which we have submitted our bids, so we look forward to some of the at least one or two projects from overseas which should get accrued in our order group. So this is how we look forward, but on this order, this guidance of 2500 email index.

Juzer Darwala, Analyst — Avaya Advisor

Okay, and if I look at your margin profile, so do you provide any kind of margin break-up, EBITDA margin break-up in our water, wastewater and renewable energy segment? And what are the expected margin ranges for each of the segments?

Manish Jain, Other

I have just explained it recently. I will repeat it for the sake of clarity for you. Okay. So margin guidance, EBITDA margin guidance from our side for water and wastewater treatment segment is 21%. From renewable, it will be somewhere in the range of 15 to 18%. Blended level, it should be between 19 to 20%. So this should be on a console basis, it should look to be 19 to 20%.

Juzer Darwala, Analyst — Avaya Advisor

Okay, okay. Yeah, thank you for the detailed explanation, sir, and wish you all the best, and happy Diwali to you.

Manish Jain, Other

Thank you. Happy Diwali.

Operator

The next question comes from the line of Sheetal Shah, an individual investor. Please go ahead.

Manish Jain, Other

Hello, am I audible? Yes, sir. Yeah, you are audible. Please go.

Sheetal Shah, Analyst — Individual Investor

Very good afternoon, sir. Seasons greetings to you all, sir. Sir, my question is related to, sir, what will be the next growth driver for the company in the next three to five years, which will help the company to grow sustainably over a period of time, both in terms of revenue as well as in terms of profitability, a long-term user in the next two to three, three to five years? Means any sectors you want to diversify like AI or data center or something like that, or you want to grow your international presence where we can get government-funded projects like our competitors are doing, anything like that. That would be very helpful, sir.

Manish Jain, Other

There are two segments in which the company is present. One is the water and wastewater treatment segment and second is the renewable segment. First, if I come to the water and wastewater treatment segment, there are

Manish Jain, Other

ample opportunities which are available in India. The person it is transpires from various wastewater treatment projects in terms of the new sewage treatment plant which are coming up. Upgradation of existing plants,

Manish Jain, Other

then reuse of these sewage treatment plants, construction of new ETTs or CETTs, ZLD systems, desalination plants.

Manish Jain, Other

So basically, these are the main drivers of growth right now in India with various government schemes, the CETP is coming directly from the industrial development corporations or from the trust. And the desalination projects have been coming from industrial bodies. So this is driving growth in India. Apart from this, yes, there are ample opportunities available overseas as well. We are moving over fees. We have submitted our bids at some of the projects and we are expecting results to be there. So it will be one of the key growth drivers for the company. The second one is the renewable wherein we entered just last year within a span of just one year and which is going on now further. There is a very healthy order book which we have accrued in this particular segment. The segment is interesting. The growth is really fast. There is a moderation in the margin profile. The renewable segment doesn't draw the level of margins which the water and wastewater segment draws. However, the execution cycle is really fast. So if we see on an ROE or ROCE perspective point of view, The renewable in itself also commands a lot of interest and definitely this sector will continue to grow. So as an integration, if we say we will continue to grow in both the segments and both the segments will drive growth for company in next four to five years, which is clearly visible even as on date.

Manish Jain, Other

Regarding raw material insulation,

Sheetal Shah, Analyst — Individual Investor

is it pass-through, or do we still feel that it will bear the cost?

Manish Jain, Other

There is a price escalation clause in the big documents,

Manish Jain, Other

standards, or arguments that we do, but it does not get passed on to 100% extent. There is some price part or some cost which we have to bear as well because of which we have lowered our EBITDA margin guidance to an extent. Though we lowered our EBITDA margin guidance in the water and wastewater segment to be 21%, still we have been able to achieve that EBITDA margin of 24% in Q2. So that says our guidance has got lowered, but on the execution front, we have been able to deliver the same type of margins which we have done in the past. So 24% is

Manish Jain, Other

what we have achieved in Q2 on extended alone basis.

Sheetal Shah, Analyst — Individual Investor

Okay, sir. Thank you, and all the best for the future, sir.

Operator

Thanks a lot. The next question comes from the line of Atul Kumar, an individual investor. Please go ahead.

Atul Kumar, Analyst — Individual Investor

Thanks for the opportunity again, sir. So my one question, I have one question on the operation and maintenance percentages in revenue. So far, the last two years, we have been doing around 3 to 4% of total revenue that comes from OMM. Currently, we have an order book of around 1,100 crores just from O&M. So when are we expecting to see more and more O&M percentage in the total revenue? And I am guessing the margin will be higher there. So I think that will also help us increase the overall margin. So by when, let's say, next one, two, three years, what O&M percentage we are targeting as a part of overall revenue?

Manish Jain, Other

As the sales turnover will increase in the company, the operation and maintenance revenues will also increase. But at least as present, what I can say, operation and maintenance revenues will continue to be in the range of 3 to 4% of the total top line on a standalone basis. If there are any further projects wherein we enter into ZLD systems, where the recurring cost goes high, so the O&M revenues may as a percentage may increase. Absolute terms, operation and maintenance will increase. The operation and maintenance revenues will get generated over a period of 5 to 15 years. So at an average level what we can say is somewhere around 100 crores. I expect that as the project will keep on completing, there are three projects right now we are under almost on the completion. So the O&M revenues will start generating from these three projects as well, which is namely Mathura, which was a ham project with confection completion is already there. We expect COD very soon. Yamuna Nagar and Amrit sir. These two projects are also on the verge of completion. So as the projects will keep on completing, the O&M revenues will keep on growing. But as a percentage, again, I will say it will be, it will remain to be in the range of around maybe 3 to 4 percent, maybe, may it increase likely to 5 percent.

Atul Kumar, Analyst — Individual Investor

Okay, okay, sir. That's helpful. Thank you. Thank you so much.

Operator

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Sanjay Jain for the closing remarks.

Sanjay Jain, Chairman

Thank you. Thank you everyone for your questions and for participating in today's earning call. We remain focused on handling our poor water and wastewater treatment business, executing our existing order book and expanding our renewable energy capabilities in a disciplined manner. We appreciate your continued support and look forward to updating you on our progress in the coming quarter. Thank you, and have a wonderful day. Thank you.

Operator

Thank you, sir. Ladies and gentlemen, on behalf of Enviro Infra Engineers Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.