Concord Enviro Systems Ltd (CEWATER) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day. You all have been connected to Concord Enviro Systems Limited Q2 FY '27 earnings conference call. The call will begin shortly, please stay connected.
Moderator: Ladies and gentlemen, good day and welcome to Concord Enviro Systems Limited Q2 FY '27 earnings conference call. 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 the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note,
Moderator: conference is being recorded. I now hand the conference over to Mr. Kanav Khanna from EY-IRP. Thank you and over to you sir.
Kanav Khanna (EY-IRP): Thanks Anam, and good morning to all the participants. And thank you for joining us in the Q2 FY27 earnings call. Please note that we have mailed out the results to everyone and you can see it on the exchanges and on our website. In case you haven't received it, we'll be happy to send it over. Before we proceed to the call, let me remind that the discussions may contain some forward-looking statements and invoke some known and unknown risks, uncertainties and factors. Must be viewed in conjunction with our business model and could also cause future results and performance to vary significantly from what has been implied. To take the results of the quarter and half year and to answer to all your queries, we have the management of Concord Enviro Systems Limited with us. Mr. Prayas Goel, Chairman and Managing Director, Mr. Prerak Goel, Executive Director, and Mr. Shleshank Lahiri, Group CFO. We'll start with the brief overview of the quarter gone past and we'll follow it up with some question-and-answers. With that being said, I'll transfer the call to the management. Over to you Prayas.
Prayas Goel (Concord Enviro Systems Ltd): Thank you Kanav. Good morning ladies and gentlemen, and a very warm welcome to Concord Enviro Systems Limited's Q2 and H1 FY27 earnings call. Thank you for taking the time to join us today. Let me begin with an update on the key developments across our businesses, before taking you through our performance during the quarter and the first half of the financial year. The broader demand for environmental and industrial water and wastewater treatment solutions remains encouraging. Increasing concerns around industrial water availability, tighter environmental compliance requirements and growing focus on water recycling continue to support demand for ZLD (Zero Liquid Discharge), wastewater recycling, desalination and membrane-based treatment solutions. We are witnessing healthy opportunities across sectors such as steel, solar manufacturing, chemicals, pharmaceuticals, food and beverage, and industrial wastewater recycling as general. Our integrated business model positions us well to address these opportunities. Our offerings span across water and wastewater treatment systems, operation and maintenance services, after-market solutions such as spares and consumables. Our business and revenue mix during the quarter remained predominantly India-focused. Domestic revenue represented approximately 68% of Q2 FY27 revenue, while international revenue accounted for approximately 32%. This domestic concentration supported the improvement in quarterly revenue despite a relatively low contribution from export orders during the period. The first half performance should be viewed in the context of the temporary supply chain disruption experienced recently. Geopolitical developments in the Middle East affected operations in the GCC region, and created supply chain and logistics constraints, including delays in the movement of membranes and other critical components from the UAE. These factor delayed project execution and shipments in Q1 and consequently, affected the H1 FY27 comparison. During Q2, execution improved and the business returned to year-on-year revenue growth. We continue to maintain adequate inventory and critical stocks to support both domestic execution and future export requirements. This inventory discipline provides us with greater resilience against logistics volatility, and positions us to respond quickly as international dispatches on project schedules which are now normalizing. Coming to our order book, it stood at ₹7,164 million as of September 30th, 2026, representing a 34% growth on a year-and-year sequential basis. The momentum in order book inflows also remains strong, with domestic order inflows during the first half of FY27 increasing by 55% compared to H1 last year. During the quarter, we also secured a significant order from a leading alc- global alcobev player for its Mexico plant, further strengthening our order book. Overall, our order book is healthy, reflecting the strength of the underlying demand environment and the increasing scale of opportunities available to the company. Our focus has now moved decisively from launching new initiatives to implementing and executing them. The platforms and products introduced over the past year are progressing into customer engagement, order con- conversion, project delivery and commercial scale-up. The HEX extreme heat exchanger continues to gain traction and we have received orders that validate customer interest in the product. Its corrosion-resistant design and application across demanding industrial environments expand our addressable market beyond conventional water treatment, wastewater treatment, and provide an additional technology-led growth avenue. Our compressed biogas (CBG) is also progressing from development into execution, supported by orders received in the CBG segment. This leveraged
Prayas Goel (Concord Enviro Systems Ltd): capabilities in anaerobic digestion and enables customers to convert organic waste into renewable energy while lowering their environmental footprint. The industrial dehumidification opportunity through our partnership with WAHA is also now in motion. The partnership broadens our portfolio into humidity control and industrial product drying while creating cross-selling opportunities across industries where we already have customer relationships, including pharmaceuticals, food and beverages, battery manufacturing, solar manufacturing, and semiconductors. Our momentum in the solar manufacturing sector has also strengthened. On October 1st, 2027, subsequent to the close of Q2, our wholly owned subsidiary, Rochem Separation Systems (India) Private Limited, received orders aggregating to Rs. 14.25 crore from a leading solar voltaic photovoltaic module manufacturer. These orders cover the supply, installation, testing and commissioning of advanced water and wastewater treatment systems at the customer's Hyderabad facility. The scope includes pretreatment, reverse osmosis, and evaporation systems along with related installation and commissioning services. Equipment delivery is scheduled for end of November and early December with overall completion targeted by mid-January 2027. This order reflects continued customer confidence in Rochem's engineering and execution capabilities, further strengthens our presence in the industrial water and wastewater treatment segment and enhances revenue visibility over the execution period. It also reinforces our position in the rapidly expanding solar photovoltaic manufacturing ecosystem, which we believe can emerge as an important growth vertical for the company. We are also making progress in our membrane technology portfolio. Our chlorine-resistant membrane technology is being commercialized for treated sewage applications while new membrane products are being positioned for data centers, semiconductors, industrial water recycling, and treated sewage markets in the GCC region. We are also evaluating partnerships and licensing agreements to scale these technologies across international markets. RO-Serve, our water as a service platform, continues to be an important pillar of our growth strategy. Through its asset-light water management model, RO-Serve helps customers address their water treatment and sustainability requirements, while enabling Concord Enviro to build recurring and annuity style revenue streams. Desalination also remains an important area of opportunity for us. With more than three decades of experience, we are well positioned to address demand from industrial desalination, coastal areas, offshore and marine applications, and the Indian Navy's modernization programs and growing investments. We believe our established capabilities in naval desalination provides a strong platform for participating in future opportunities in this segment. Our strengthened order book, healthy demand across steel, solar manufacturing, chemicals, and pharmaceuticals, growing potential for H-EXTREME and dehumidification, continued scaling of RO-Serve, and our expanding membrane portfolio provide us with multiple avenues for sustainable growth led led primarily by opportunities in India. With that, I would now like to hand over to Mr. Prerak Goel, Executive Director, to take you through the financial performance for Q2 and the first half of FY27. Thank you. Over to you, Prerak.
Prerak Goel (Concord Enviro Systems Ltd): Thank you, Paras. Good morning, everyone. Just to recap on the financial performance, so the revenue from operations for Q2 FY27 stood at 1,344.55 million compared with 1,248.45 million in Q2 FY26, representing a growth of 7.7% year-on-year. The improvement was led by stronger domestic execution with India contributing approximately 68% of quarterly revenue. Gross profit for the quarter increased to 772.67 million from 629.93 million in Q2 FY26. Gross gross profit margins improved from 57.5% of improved to 57.5% from 50.5% in the corresponding quarter last year reflecting a more favorable revenue mix. EBITDA for Q2 FY27 stood at 77.79 million compared with 76.57 million in Q2 FY26, an increase of 1.6% year-on-year. EBITDA margin stood at 5.8% from 6.1% in Q2 FY26. The marginal dip at EBITDA level was due to some forex losses the company suffered due to the peso Mexican Peso versus Dollar movement. While H1 FY27 reflects the impact of Q1 execution delays, including geopolitical and supply chain disruptions affecting GCC-linked operations and shipments, Q2 demonstrates an improvement in the underlying trajectory. Our focus remains on accelerating execution of the India-led order book, converting the domestic opportunity pipeline, and normalizing international deliveries as logistical conditions improve. Our order visibility remains healthy, supported by demand across industrial,
Prerak Goel (Concord Enviro Systems Ltd): maintaining a disciplined approach to project selection and working capital management. Looking ahead, we remain confident about the company's growth prospects. A multi-year high order book, healthy demand across steel, solar manufacturing, chemicals, and pharmaceuticals, and an increasing participation in large scale projects provide strong revenue visibility. At the same time, the growing contribution from recurring O&M revenues along with our investments in membrane technologies, desalination, and industrial CBG solutions will support margin improvement and greater business resilience. With deferred projects expected to materialize and supply chain conditions normalizing, we believe Concord Enviro is well-positioned to deliver profitable growth and create sustainable long-term value for our stakeholders. With that, we now open the floor for question and answers. Thank you.
Moderator: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator: The first question is from the line of Shailesh Vora from Prudent Investments. Please go ahead.
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