Antony Waste Handling Cell LtdQ1 FY23Other Utilities

Antony Waste Handling Cell Ltd

Q1 FY23 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

N/A

Order

Yes

Capex

Yes

3 of 4 growth signals are positive.

Revenue guidance

Category 3

→The company expects continued revenue growth driven by higher core revenue and capex-related revenue recognition.
→Waste-to-energy segment anticipates annual revenue of around Rs. 60-65 Crores at full-scale operation; next year’s revenue will be for 6-9 months due to staggered operations.
→New large contracts are in the pipeline, including a northern India C&T contract worth over Rs. 100 Crores and a large processing plant EPC plus O&M contract.
→The renewal of contracts, such as the Mumbai C&T project starting commercial operations in Q1 FY2025 (April 2024), will add to revenue streams.
→The company is actively bidding for several projects and expects to win and scale these to support sustainable growth.
→Focus on improving operational efficiency and capitalizing on user fee collections to hedge receivables risk supports growth.
→Steady-state EBITDA margins expected at 22-24% with improving revenue mix and commercial operations.

Category 1

→Antony Waste Handling Cell Limited expects steady state EBITDA margins of 22-24%, improving from current softer margins affected by higher project revenue and delays in escalations approval.
→Waste-to-energy projects are expected to generate annual revenues of ₹60-65 Crores on full scale, starting 6-9 months of operation next fiscal year with higher EBITDA margins than consolidated numbers.
→Commercial operations of new projects (e.g., Mumbai C&T project) expected to start April 2024, contributing to revenue growth.
→Adjusted EBITDA and PAT would have been higher if escalation reimbursements (~₹19-21 Crores) were recognized timely; these are expected to stabilize with elected municipal members.
→Operating efficiency and revenue recognition improvements are key management focus areas to drive sustainable growth.
→No specific EPS guidance given, but management remains confident of revenue and margin growth driven by capex and new operations ramp-up.
→Capital structure changes like bonus issue not currently planned but may be considered by the Board.

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→There is a significant increase in borrowing mainly due to the waste-to-energy project at Pimpri with Rs. 126 Crores incremental debt and additional debt related to new projects in North Delhi and Nashik (Page 14).
→No explicit mention of any new planned fundraising through debt or equity was disclosed during the call.
→Capital structure changes or issuance of bonus shares are under internal discussion with the Board, no concrete plan announced yet (Page 15).
→The company is focused on projects and operational expansions, with bids submitted for new large contracts but no direct reference to raising new funds through equity or debt in near term.
→Debt-equity ratio stood at 0.4x as of March 2023, indicating moderate leverage with room for financial maneuvering (Page 5).

Yes

→Currently, about 18% of Antony Waste's Collection & Transportation (C&T) revenues are up for renewal, with contracts already expired but extended. The company has visibility of at least 12 months for these contracts.
→Approximately 45% of the revenue is linked to contracts expiring soon, reflecting around 11% of gross core revenue.
→New commercial operations for the Mumbai C&T project are expected to start in Q1 FY2024 (around April 2024).
→The company has submitted bids for significant new projects:
→ - A large C&T contract in northern India with an annual value upwards of Rs. 100 Crores.
→ - A large processing plant in the western zone, involving EPC contract plus 15 years of O&M.
→Several other projects are in the pipeline expected to be bid on in the coming months.

Yes

→Significant capex incurred during the year with Rs. 126 Crores drawdown at the PCMC waste-to-energy plant.
→Additional capex related to new Collection & Transportation (C&T) operations.
→Net debt as of March 2023 stood at Rs. 298.6 Crores with a net debt-to-equity ratio of 0.4x.
→Waste-to-energy operations expected to reach staggered PLF and commercial operations, contributing to revenues starting FY2024.
→Large EPC plus O&M processing plant project in the western zone (15-year contract) bidding underway.
→Large C&T contract in northern India (annual contract value upwards of Rs. 100 Crores) bid submitted.
→Several projects in the pipeline for bidding in coming months, indicating ongoing strategic investment plans.
→Company conservative on capital structuring; no active plans yet for bonus shares or major structural capital moves, but is open to Board guidance.

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