EMS Limited (EMSLIMITED) Q1 2027 Earnings Call Transcript

Good afternoon, ladies and gentlemen, and welcome to the earnings call of Q1-FY27 for EMS Limited. As a reminder, all participant lines will be in listen-only mode. There will be an opportunity for you to ask questions after the management discussion concludes. Should you need assistance during the conference call, please signal an operator by pressing star followed by zero on your touch-tone phone. EMS Limited was incorporated in 2010 by Mr. Ramvir Singh and Mr. Ashish Tomar, and is involved in business of Sea Ridge Solution Provider, Water Supply System, Water and Wage Treatment Plans, Electrical Transmission and Distribution, Road and Allied Works, Operation and Maintenance of Wage Water Scheme Projects, and Water Supply Scheme Projects for Government Authorities and Bodies. Let us now begin with the introduction of the management team. We have with us today Mr. Ashish Tomar, Promoter and Managing Director of the company. Also joining us today is Mr. H.K. Consul, Chief Executive Officer. I would now like to request Mr. Ashish Tomar, Promoter and Managing Director, to give his opening remarks. Over to you, sir.

Good afternoon, everyone. I welcome you all to the earnings conference call of EMS Limited for the quarter ending on 30th of June, 2026. Yes, so as we have already uploaded the results of the last quarter, I'm sure you are aware for which our operating income stood at 125.72 crores on a standalone basis. And Pat stands at 15.03 crores. 184.65%. This is our concern. Operating income stands at 157.24.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset 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 Daksh Prashar, with Resvallado Research. Please go ahead. Hi, sir. Mardy.

Yes.

Yeah, so I just had a bunch of questions.

So on the Western Nile project, has it been impacted by the election-related restrictions with those restrictions now behind you? Thank you. And when can we expect it to return to a storage ban execution? Can you please read the question? I think there were some disturbance.

Mr. Dax, you're not audible. Could you please come closer to the mic and speak? Yeah, I'm audible. Also, can you please use your handset, sir?

Are they going to launch it? Oh, yes. Yeah, let's see how it launches. Can you please ask the question? We'll try to answer it.

On the West Bengal project, it is impacted by the election. Now, with those exceptions now behind you, has execution reached the 70 to 80 crore quarterly earned rate, and when can we expect it to return to its business?

Actions have already been lifted. At which you are asking for the execution, I think that would only be achieved from what Sir, I just had one other question.

You had highlighted a 2,500 to 3,000 crore in the pipeline across Delhi and Maharashtra. Would you give us an update on how much has this? How much of a style plan do you expect?

We converted... With that also, till date, in the second quarter, we have received an work order of about 158. Elvin. So, I think there's still some time left for the...

If you ask a question, you may press star and 1. The next question comes from the line of Tanjay, which are associated. Please go ahead. Do we plan to respond or work to any other steps?

We are continuing to bid in other states also. We are bidding in Bihar. in Maharashtra and Karnataka also.

And what is our other book? So size of other book?

It is 2,329 crore, as of now.

And interest capital, please go ahead.

Hello, sir. Am I audible?

Yeah.

Yes. Sir, my question is more of regarding to the margin side. Sir, what is leading this, you know, reduction in the margins that we see today? And what are we doing today to, you know, take this margin back to the historical years?

This is the question. It was asked in the last phone call also, what happens in the last... So, what happens in civil engineering projects? For whatever reason, work is hampered due to whatsoever reason, the margins are... You cannot remove it for a hindrance of a month or so. So that was the reason. You will see that once our revenue will increase, the margins will automatically increase. The difference in Q4 of 26 and Q1 of this 26-27, our margins have already increased. That was 6.3% in Q4 of FY26, and it has increased by 11.95% in Q1 of FY26-27. So, if we are going to jump another 50% in next quarter, hypothetically, maybe 30% we are planning to jump, and again 40-50%, and the whole year... which was, in financial year, 24 purchase, that is of the order of 900 to 950 crores. So that will automatically come to that level, because we cannot remove for temporary hindrance any type of manpower, our establishment, and all that. So that is the best explanation. And one more thing, sometimes when there is a rain, there is a hazard, there is a destruction, there is a... Thank you. So, we have to invest some more amount, and that is blamed in later stage, maybe in a year or two, that is realized with the government sanctions and all that. So, this is the obvious reason. I think you could have got it, and we will definitely come back to our normal margins, definitely slightly less margins, which used to be in 23-24. Because now some competition is increasing, and we cannot come to that level, but add power to that level.

But sir, thank you for this explanation. But my question would be, sir, this issue will persist almost till we are operating, because we are going to see rains every year coming in, and this kind of disruptions will always happen. So what will we do to do something that will not affect this?

No, there are different reasons for every time. Although any management takes account all the possible force measures, there is no doubt. due to heavy rains in Uttarakhand, and over-cautioned by the management of the Uttarakhand government that no sewerage work will be done at all. So that couldn't be ramped up in even quarter three and quarter four. It is being ramped up, because after destruction, government issues so many directions that if there is any loss, you give the revised estimate, you claim the escalation, so many things. And in government bureaucracy, it takes a lot of time. So now we have started ramping up, and now again this Q2 is always a rainy season. So in this rainy season, we will increase with the Q1, but not to the extent we are intending, not by the amount of 50%, but 30-35% we will increase. And in Q3 and Q4, we will increase by more than 50%. So the whole year, if we cumulatively see... We take into account these things, but sometimes these problems become more than expectation. So it happens in civil engineering projects. It is not inside the room project. I think it happens with all the good corporate companies also. So, that is the explanation from our side. So, final question.

Sir, our working capital cycle is... Because if we don't control this, it will eventually affect our cash flow.

For working capital, definitely, once work is stopped, you know, due to whatsoever reason, then payment from the government is delayed. And payment from the government is delayed, it hamper the work again. So this is a cycle, it becomes like an egg and chicken story. There is no payment, work is slowed. Work is slowed, there is less generation of bills. But working capital, we usually need working capital for 120 days turnover. So that is around, if we go for 1,000 crore turnover, then 300, 350 crore is sufficient working capital for us. Sir, I was asking about working capital.

Please. Yeah, that's around 120 days. The average working capital days are 120 days. Thank you. Thank you for answering.

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

Hi, good afternoon. You're welcome. Yeah, so I just want to understand that how long does it usually take to convert a contract from order book pipeline to actual revenue?

Actually, once there is a contract, means after completion of all the contracting formalities, there is a work order issued. Once the work order issues, because most of the projects are EPC projects, it usually takes six months in preparing and developing engineering projects and estimates and getting approval from the concerned department. Then, it is a start, work actually at site is started, so it may take 8-9 months after getting the work order to start the real revenue.

Okay. So basically, it's a process of a one year.

No, the project timelines are typically between 2-3 years.

Project timeline is 2-3 years, but revenue starts coming after 6-7 months only, after work order is issued.

Okay. Okay, and the second question is, yeah, yeah, please continue, sorry.

Yeah, so the amount of work order that is converted into revenue, the typical timeline is from 18 to 24 months. If a project is for a period of about two years, so six months are for engineering and approvals of design, and 18 months are for execution, by which the revenue starts coming in.

Okay. Okay, so my second question is like, what is the realistic goal for EBITDA margin, considering company's current position, and by when can it be achieved?

I think by the end of this year, we would be at par with our 24-25 numbers in terms of revenue and in terms of EBITDA impact.

Okay. Okay. Thanks. Thanks. I'm done with my questions.

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

My question is, what is the reason for sequential increase in financial numbers despite Q1 historically not being a strong quarter for the company? And are there any capex or investment plans for FY27?

You know, I couldn't get the first part of your question. Can you please repeat?

I'll repeat. Yes, yes. What is the reason for sequential increase in financial numbers despite Q1 historically not being a strong quarter for the company? And are there any capex or investment plans for FY27?

Yeah, no, so... These numbers are typically, as we are bouncing back from a slower quarter last year, and as we get back to our routine numbers, which we have already explained, that by the end of this year, we are planning to grow by at least 50% with respect to the last year. And as far as any CAPEX plans are concerned, I think there is no such CAPEX plan as of yet.

Okay. Thank you, sir.

Thank you.

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. The line of Dhruv in Gurani and in Vigil in Veshta. Please go ahead.

Yeah, so I have two questions. Firstly, you said that we will be ending the year between 900 and 950 revenue. So keeping in mind the run rate that we're going out, we would have to do around 250 to 270 crores of revenue going forward in the next three quarters. So do you expect the revenues in the S2? It will be coming in, or the next quarter will also be similar to the last two quarters that we are having. Thank you. Thank you. Investor presentation, you know, you should compare the quarters on year-on-year basis instead of, you know, showing that, you know, there was a growth this quarter from the previous quarter. That is a bit deceiving, I feel. Thank you. Yes. As far as your first question is concerned, Good morning, everyone, and welcome to the call. The coming three quarters are concerned, the strongest would be Q4, and the weakest would be Q. Q2 would be about 30 to 35% higher than Q1, and thereafter, you... Here's your suggestion regarding quarter-to-quarter comparison. Good morning, everyone. After every quarter.

Right, and how about the EBITDA impact margin, you know, because last few quarters...

No, no, so we are confident that we would be achieving those numbers, because the work that we currently have in our order book is of similar margins and was big by keeping those numbers in mind. But since we couldn't convert it to revenue by whatever reasons the restrictions imposed by the government or by For reasons beyond our control, our expenditures are fixed. So that's why the numbers seem to be on the lower side. But since we are now getting back to converting it to revenue, the margins would also bounce back. Understood. So, what we are saying is Q3-Q4 would be very good quarters, but to actually meet 950 CR target, we'll have to do around 300 CR of revenues in those two quarters. So, we are confident of doing that much revenue? Okay. Thank you.

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. Please go ahead.

So far, as you said, our book size is around the 2329th year, so I just wondered how much will be executed

in this year, in FI27.

I think as we've already given a guidance that in percentage terms, we would increase by about 50% with respect to our last year's number. So I think in this quarter, we already achieved 125. The balance would be achieved in the working quarters. Like, what is the revenue contribution of our top five plans?

Five clients.

Thank you. Thank you.

You may press star and 1 to ask a question. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and 1. The next question comes from the line of, okay, the current participant has been disconnected. Participants, if you wish to ask a question, you may press star and 1. Okay. Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Ashish Tomar for closing comments.

Yeah. I'd like to thank everyone for participating in the call, and thank you, Mr. Consultor, for joining this call with us, and thank you, everyone, for arranging this call. Thank you.

Thank you. Ladies and gentlemen, on behalf of EMS Limited, that concludes today's session. Thank you for your participation. You may now disconnect your lines.

Thank you.