Vishwanath – can you please share the microchip PF?

@hariharancj You have nearly stolen my update!!! Small differences; all stocks in the list are the same. Order is slightly different. Also, AZAD is less than 6 months. Therefore, I will not include in my pf for now. Will post my update.

@james_kerala This smallcap pf has given 2.7% from April 1st to May 31st. The other pf based on microcap index has given around 8% for the same period.

Q4 FY24 Concall notes

Domestic Operations

• Total Domestic Revenue: Rs. 1,077 crores
  • Growth: 7.4% YoY
• Domestic Product Business: Rs. 261 crores
  • Growth: 19% YoY
  • Order Book: Rs. 348 crores
• Domestic Project Business: Rs. 816 crores
  • Growth: 4% YoY
  • Record Order Execution: Rs. 343 crores in Q4
  • Order Book: Rs. 3,054 crores
  • Notable Development: Madhya Pradesh Jal Nigam contract termination, 8 other projects on track

International Operations

• Order Book: Rs. 458 crores (as of 31st March 2024)
• Gruppo Aturia: Strong demand in MENA region, robust aftermarket revenues
• WPIL South Africa: Focus on water sector, aftermarket contracts from Eskom Power
• Sterling Pumps and United Pumps Australia: Robust order books, strong growth expected
• WPIL Thailand: Record revenues in FY24, continued momentum expected

Strategic Developments

• Navy Order Execution: On track, contributing to revenue growth from FY25 onwards
• Product Division Outlook: Improved due to new products for oil, gas, sewage, and drainage
• Inorganic Opportunities: Pursuing acquisitions, positive outcomes anticipated by mid FY25
• Focus on Core Industrial Pump Business: Following successful divestment of Rutschi’s nuclear business

Challenges and Disputes

• Madhya Pradesh Jal Nigam Contract: Disputed termination due to delayed land allotment, exploring contractual remedies

Future Outlook

• Strong Revenue Visibility: Positive outlook for FY25 with growing order book and successful project executions

Profitability

• Domestic and International: EBITDA margins approximately 17%-18%, within the band of 15%-20%

Navy Order

• Framework Agreement: Rs. 17-18 crores
• Completion Timeline: Expected within the next 6 months (ongoing for 12 months)

Cash Balance

• Current Balance: Rs. 630 crores
• Planned Deployment: Focus on inorganic growth opportunities (actively pursuing acquisitions, results expected from mid-FY25)

Sundry Debtors

• Increase: Rs. 288 crores due to high invoicing in March
• Collection: Expected to be collected in the normal course during the first quarter

Madhya Pradesh Jal Nigam Contract

• Terminated Contract Value: Rs. 155-160 crores
• Remaining Contracts: 8 contracts in various stages worth Rs. 1,100 crores
• Order Book Status: Terminated contract value removed from the order book
• Reassignment Status: Contract not awarded to anyone else yet

Working Capital

• Increase: From 79 to 120 days
• Reason: High invoicing in the last quarter, particularly in March
• Normalization: Expected to normalize by the end of the first quarter

Project Business

• Scope: Turnkey EPC projects covering water, irrigation, industrial, and municipal sectors.
• Order Book: Includes AMRUT and JJM projects, majorly in Assam, West Bengal, and Madhya Pradesh.
• Project Sizes: Rs. 200-600 crores.

Competitive Landscape

• Competitors: Range from large players like Larsen & Toubro to smaller companies.
• Tender Participation: Varies; larger projects attract fewer participants.

Margins and Financials

• EBITDA Margins: Targeting 15%-20%.
• Order Book Impact: Mitigated loss of Rs. 155-160 crore contract through other projects and bank guarantees.

Market Trends

• Segment Dynamics: Increase in rural water supply projects, offsetting decrease in irrigation projects.
• Future Opportunities: Continued demand with significant pipeline projects worth Rs. 1-1.5 lakh crores annually.

Execution and Payments

• Consistency: Similar execution and payment conditions compared to the past.
• Sector Diversification: Selective participation in sewage projects; balanced focus across water sectors.

Financial and Operational Outlook

• Revenue Growth: Current revenue at Rs. 800 crores; ample business opportunities for growth.
• Long-term Sustainability: Sector anticipated to sustain and drive revenue growth.

Product Segment Overview

• Execution Timeline: Orders typically span 4 to 8 months, depending on product type.
• Revenue Growth: Diversified product portfolio yielding strong growth and profitability.
• Segment Focus: Strong order book from growing segments like Navy and sewage drainage.
• Profitability: Margins remain robust, targeted between 15% and 20%.

Recent Orders

• Nature of Orders: Framework orders with long-term implications.
• Significance: Represents potential recurring source of orders over 20-30 years.

Domestic Order Book Analysis

• FY23 vs. FY24 Order Book: Decrease from Rs. 36,410 million to Rs. 30,543 million.
• Reasoning: Slowdown attributed to recent elections.

Revenue Growth Trajectory

• Expectations: Anticipating good growth in both project and product segments.
• Execution Challenges: Earlier challenges, like supply chain constraints, gradually addressed, paving the way for streamlined execution and growth.

Pipeline and Opportunities

• Execution vs. Booking:
  • Balancing focus on both execution and booking new orders.
• Inquiry Pipeline:
  • Significant inquiries in various sectors, ensuring no challenge in replacing current revenue levels.
• Opportunity Scale:
  • Tenders in water segment alone range from Rs. 5,000 to Rs. 8,000 crores, providing ample opportunities.
• Geographical Expansion:
  • Exploring opportunities in multiple states and sectors for a more balanced portfolio.
• Order Book Growth:
  • Expected to align with revenue growth and industry norms.