Antony Waste – Long Term

Few points to note:

1. Volume growth from existing project is itself 6-8% per annum. So the idea of growing at 15-18% is plausible.
2. Even if they dont get any additional projects, the company is expected to grow at 15-20% as per the management for the next 4-5 years. The management has mentioned in several interviews and con calls that they expect to repay their entire debt in the next 4-5 years.
3. The compant generates over 100cr of cash from operating activities. Its credit rating has gradually improved. Therefore, it can generate ample cash and take on debt to invest in any future projects.
4. Regarding competition in C&T, its not easy as it seems. Firstly, not all municipalities are financially healthy. So, one has to really pick and choose the projects. Thats where the experience of the management becomes relevant. Recently, as per the concall, the company did not bid for the chennai WTE project due to the Chennai municipality’s bad reputation. Not just that, AWHCL has a cluster based approach that targets projects nearby existing projects, which helps to reduce costs by increasing operating efficiency.
5. If they get a go ahead to build WTE plants at Kanjurmarg from BMC. My guess is, the project could easily generate revenue upwards of 250 cr, as it would be 3-4 times of PCMC.

Right question to ask is what is a good valuation to purchase this stock.

Given these growth prospects, at what price does the stock scream buy.

IMHO, PE of 15 at EPS of FY 24 i.e 450rs is a good buying price.

What do you guys think? Would be happy to discuss valuations.