I understand the concerns of the people in the forum- I share many of them.
But here’s what I think:
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Competition like Urban Enviro seem good. But AWHCL is many times bigger, and has major Metros for it’s business.
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Waste management seems linear- more fixed assets, more revenue. This alongside fairly stable but mildly volatile margins makes it seem like a bad business. But the scope for revenue growth is tremendous. Goverment risk is always there in India so I don’t agree with the regulatory risk that people are excessively worried about. It is a service business, with better margins than retail stores and restaurants.
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Does seem to be undergoing small capex- always a good sign.
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I don’t think WM business is a commodity. There is no raw material or fluctuations in revenue. Fixed costs are there, yes but that makes it more like a safe utility . The actual payment form governments might take time to arrive, but with such monopolies at hand, AWHCL should be considered very safe.
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There is some decent scope for scale economies. And as they manage more waste, their operations will become streamlined, more so than other upstarts.
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And the main thing is that professional waste management is such a new but essential service in India. It will grow by a lot this coming decade— to not have it grow means the death of all major metros.
Have you seen our streets, the dusty roads, the garbage dumps be it in Bangalore or the gigantic Delhi Garbage mountain?
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