WPIL Ltd Q1 FY27 Earnings Call Summary

Event Participants

Executives

2 Krishna Kumar Ganeriwala, Prakash Agarwal

Analysts

8 Deepak Purswani, Deeya Jain, Divyansh, Jainam Doshi, Pravinchandra Patel, Ravi Naredi, Saket Kapoor, Shubhamkar Ojha

Financials & KPIs

Geographic & Segment Commentary

• International Business: Revenue nearly doubled YoY to ₹386 crores with EBITDA margin improving materially to 15%; order book at ₹2,891 crores provides strong medium-term visibility across both product and project operations.

• Gruppo Aturia (Italy - International Products): Witnessed fresh demand from the MENA region across oil & gas and water sectors, supported by robust demand for gas turbine pumps.

• Sterling and United (Australia): Benefited from healthy inquiry pipelines from LNG, mining and industrial projects.

• WPIL Thailand: Continued to secure healthy orders from the drainage sector.

• MISA Italy (International Projects): Successfully completed all legacy projects and is witnessing a healthy pipeline of new irrigation and drainage business.

• PCI Africa (South Africa): Commenced execution of large contracts secured during FY26 in the South African water sector; expected to gain momentum through the year, supported by a strong order pipeline and attractive margin profile.

• Domestic Product Division: Revenue at ₹72 crores vs ₹65 crores YoY; order book at ₹459 crores with good traction in power and irrigation sectors; focus on expanding export business for long-term growth.

• Domestic Project Division: Revenue subdued at ₹43 crores; order book at ₹1,921 crores (~₹530 crores O&M); focus on project commissioning and commencement of O&M activities; improvement expected in H2 FY27 as sector issues resolve.

Company-Specific & Strategic Commentary

• Margin Trajectory: Consolidated EBITDA margin hit 15% in Q1, at the lower end of the 15-20% target band; management expects improvement toward the ~16-17% annual average as domestic project execution recovers and international projects scale.

• Minority Stake Consolidation: Management intends to reduce minority shareholding across all subsidiaries over the medium term (2-3 years); PCI buyout is contractually agreed within 3 years to reach 100%, with other South African and Singapore subsidiaries under consideration subject to fund availability.

• MP Debarment Resolution: MP government issued a debarment notice citing slow-moving projects, preventing new bids until existing projects are completed; management is addressing concerns with a target to complete projects (currently 65-70% done) within the next year.

• Export Expansion: Continued focus on expanding the export business, which management views as an attractive long-term growth opportunity.

• JV Performance: Two joint ventures (Thailand and India, with 49% and 40% stakes respectively) contributed ₹11.24 crores in Q1 profit, both performing well with the trend expected to continue.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Margins & Raw Material Impact

• Question: Is there any impact on raw material prices and procurement due to the ongoing war? (Divyansh, Trinetra Asset Managers)
• Answer: Margins are quite stable; most raw material is steel, and while there was a short spike when Middle East exports stopped, it has balanced out given medium-to-long-term contracts. (Prakash Agarwal)
• Question: Will the enhanced Q1 margins continue in coming quarters? (Ravi Naredi, Naredi Investments)
• Answer: Consolidated margin hit 15% and the standard range is 15-20%, so it should improve only further. (Prakash Agarwal)

MP Government Debarment

• Question: What problem does the company face from the MP government? (Ravi Naredi, Naredi Investments)
• Answer: A debarment notice was issued citing slow-moving projects, preventing new bids until old projects are finished. Concerns are being addressed, with a target to complete projects within the next year - most are at 65-70% completion. (Prakash Agarwal)

Standalone Margin Decline & Domestic Project Slowdown

• Question: What led to the suboptimal standalone EBITDA margin of ~5%? (Saket Kapoor, Kapoor Company)
• Answer: Project invoicing is drastically lower because sector funds are not yet released; this is a sector-wide issue affecting all players. Resolution was expected in Q1, but is now expected in Q2, so the company is patiently waiting. (Prakash Agarwal)

JJM Receivables & Execution Timeline

• Question: What is the total pending JJM receivable and how much was received in Q1? (Shubhamkar Ojha, SKS Capital)
• Answer: Roughly ₹300-350 crores is pending, and none was received in Q1. Disbursement is procedural - funds are lying in treasury accounts (primarily West Bengal). A substantial inflow is expected in Q2, with major execution expected this year provided momentum starts. (Prakash Agarwal)

South African Projects

• Question: Where do the South African projects stand in terms of execution? (Jainam Doshi, KRIIS PMS)
• Answer: The business was acquired in May last year, so this is the first full quarter of normal run rate. Newer projects will take time; execution will further pick up once they move into the execution phase. (Prakash Agarwal)

Segment-wise Margin Profile

• Question: What are the margins in product and project divisions, and how is the project segment margin shaping up? (Deeya Jain, Sapphire Capital; Deepak Purswani, Svan Investment)
• Answer: All businesses aim to operate between 15-20% EBITDA with annual performance around 16-17%, subject to minor quarterly fluctuations. The project segment's 7% margin reflects the Indian project business pulling down operations due to drastically lower revenue with fixed costs; South African margins should inch up to 15% over time, and Indian business should calibrate upward in H2. (Prakash Agarwal)

Minority Stake Consolidation

• Question: How should we view the subsidiary stake profile, given minority interests are currently significant? (Deepak Purswani, Svan Investment)
• Answer: The intention is to reduce minority shareholding across all subsidiaries over 2-3 years. PCI has a contractual understanding to buy out other shareholders within 3 years to reach 100%; other South African and Singapore subsidiaries are under consideration subject to fund availability. (Prakash Agarwal)

Joint Venture Profitability

• Question: What is the nature of the ₹11.24 crores share of profit from associates and JVs? (Saket Kapoor, Kapoor Company)
• Answer: It comes from two JVs - one in Thailand and one in India, with 49% and 40% stakes respectively. Both have performed well, and the hope is the trend continues. (Prakash Agarwal)

Revenue Run Rate Outlook

• Question: Is the ~₹500 crores quarterly revenue run rate the new normal? (Saket Kapoor, Kapoor Company)
• Answer: Revenues should improve; the current level looks stable. India should perform better, but it depends on what happens this quarter - more or less in line. (Prakash Agarwal)

Key Takeaway

WPIL delivered consolidated Q1 FY27 revenue of ₹501 crores (+32% YoY), led by international business nearly doubling to ₹386 crores with margins at 15%, while consolidated EBITDA margin reached 15.04% - at the lower end of the 15-20% target band. Standalone performance remained weak (₹115 crores, -37% YoY) as domestic Jal Jeevan project execution stayed stalled, leaving ₹300-350 crores of receivables pending government fund disbursement and an MP government debarment notice restricting new bids until existing projects (65-70% complete) are finished within a year. The ₹5,270 crores order book (₹1,029 crores product, ₹4,241 crores projects including ₹530 crores O&M) provides strong visibility, with PCI Africa execution scaling, Gruppo Aturia seeing MENA demand, and MISA Italy completing legacy projects. Management expects domestic sector resolution in Q2 FY27 with substantial receivable inflows, H2 execution acceleration, and margin improvement toward the 16-17% annual average, while pursuing minority stake consolidation across subsidiaries over 2-3 years.