WPIL AGM Notes
The pandemic led supply chain issues resulting into drastic jump in commodities & rising inflation affected contract execution & margins, however, strong OB & improved industrial environment should ensure continued growth as new expansions will drive order intake
The pandemic led supply chain issues resulting into drastic jump in commodities & rising inflation affected contract execution & margins, however, strong OB & improved industrial environment should ensure continued growth as new expansions will drive order intake
Focus areas: Product division - new higher efficient pump models, enhancement of manufacturing infra & innovative pumping solutions Project division: competency development in all areas of civil, electro mechanical & automation engineering
Domestic front: the performance Project division was much improved with execution pick up on the new water supply projects in MP & WB; Product division was subdued as ordering activity is yet to pick up in the irrigation & industrial core sectors
Product Division: 2 segments - Assembled To Order (for general installations) & Engineered To Order (for special installations); mixed performance - good demand in ATO (municipal - water supply, sewage & drainage); subdued demand in ETO (irrigation & industries)
Project Division: witnessed execution pick-up in Q1; the div recd a prestigious contract from WB PHED dept. for Uluberia water supply system; strong OB; strengthened its in-house design, infra & engineering team; hopeful of a strong FY23
Strong demand in rural water distribution segment (Water-For-All); confident to sustain its growth momentum; considering volatile commodity prices, cautious approach to new projects and is focusing on ramping up execution
Italy: Flat sales 540 cr EBIDTA 112 cr vs 65 cr; solid OB in all divs & to grow substantially in FY23; Water div recd big orders recently - key driver; O&G doing well too; Nuclear (Rutschi) very strong & positive - focus on new EPR reactors by France moving rapidly
South Africa: subdued after an excellent FY21 primarily due to various political challenges - things started improving; a strong order book and hopes to achieve a record performance in FY23
Australia: Sterling Pumps & its subsidiary United Pumps did well with improved margins & stable topline; United Pumps looks very good post acquisition & OB is growing with strong contributions from aftermarket; robust OB to provide a strong contribution overall
Thailand: Now a major supplier to the Thai Irrigation sector and has booked a large number of significant contracts which are under execution; should lead to a significant jump in revenues & margins in FY23
Outlook: Being a leader in the pumps, it expects good growth in both domestic & overseas operations with improved outlook across businesses. Well equipped to deal with rising OB; Good balance b/w Domestic & International, and Products & Projects to become a supplier of choice
Key points from AGM
WPIL has achieved critical growth phase in last 2 years; the company has established 3 efficient platforms or key focus areas:
1) Projects
2) Products
3) International
WPIL has achieved critical growth phase in last 2 years; the company has established 3 efficient platforms or key focus areas:
1) Projects
2) Products
3) International
Projects: currently ~Rs.345 cr; this division is likely to growth more rapidly because of lesser lead time
Products: currently ~Rs.200 cr; is likely to grow at 10-15% for next few years
Overseas: currently between Rs.650-700 cr; estimate growth of 10-15% over the next 2-3 yrs
Products: currently ~Rs.200 cr; is likely to grow at 10-15% for next few years
Overseas: currently between Rs.650-700 cr; estimate growth of 10-15% over the next 2-3 yrs
"Projects OB stands over Rs.2,000 cr"
European Energy Crisis is impacting WPIL positively; the investment cycle in Oil & Gas has started; also there has been a rapid shift towards renewable energy resources. France has announced 6 nuclear reactors. This can be really fruitful for the company
CMP Rs.1,250
(Mkt Cap of Rs.1,225 cr)
Small equity of Rs.9.7 cr (FV10/-)
Total debt of over Rs.300 cr
EV: Rs.1,325 cr
Cash of over Rs.200 cr
FY22 Sales: Rs.1,181 cr
FY22 EBITDA: Rs.210 cr (18%)
FY22 Net Profit: Rs.97 cr (8%)
FY22 EPS: Rs.100/-
(Mkt Cap of Rs.1,225 cr)
Small equity of Rs.9.7 cr (FV10/-)
Total debt of over Rs.300 cr
EV: Rs.1,325 cr
Cash of over Rs.200 cr
FY22 Sales: Rs.1,181 cr
FY22 EBITDA: Rs.210 cr (18%)
FY22 Net Profit: Rs.97 cr (8%)
FY22 EPS: Rs.100/-
Q1 FY23 (look against FY22)
Sales: 299 cr
EBITDA: 52 cr (~17%)
Net: 25 cr (~8%)
EPS: 25
Sales: 299 cr
EBITDA: 52 cr (~17%)
Net: 25 cr (~8%)
EPS: 25
Robust growth, broadly resilient during Covid
Solid OB
Declining debt trend; good chunk of cash
Diversified across geographies
Healthy margin profile; good ROCEs (~20%)
Working capital cycle improved
Promoters adding
Low equity & low float (~85% with promoters, insti, HNIs)
Solid OB
Declining debt trend; good chunk of cash
Diversified across geographies
Healthy margin profile; good ROCEs (~20%)
Working capital cycle improved
Promoters adding
Low equity & low float (~85% with promoters, insti, HNIs)
WPIL is talking about growing at over 10-15% for next few years with a leadership position in the industry and good set of financials is trading at 11x of FY22 EPS.
(Please note, this is not a recommendation, above points from AR and AGM are for educational and information purpose only; kindly do all the due diligence at your end before investing)
Disc: Holding from lower levels and not going to sell in near future
Disc: Holding from lower levels and not going to sell in near future
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