💰 Financial Performance

Revenue Growth by Segment

Revenue for Q2 FY26 stood at INR 1,248 million, representing a 22% growth over the previous quarter but a 23% decline year-on-year. The YoY decline is attributed to the high base effect of the Mexico project billing in Q2 FY25. The company aspires to reach a top line of INR 1,000 crores by FY27, supported by current capacity that can handle INR 1,300 to 1,400 crores in revenue.

Geographic Revenue Split

While specific regional percentages are not disclosed, the company has significant international exposure with major projects in Mexico and Africa. Revenue in Q2 FY26 was impacted by the absence of Mexico project billings and delays in African projects, indicating a high reliance on export-heavy revenue cycles in the second half of the year.

Profitability Margins

Net Profit for H1 FY26 was INR 86.10 million, a 33.4% decrease from INR 129.26 million in H1 FY25. For FY25, the company reported a Net Profit of INR 514.93 million, up 24.26% from FY24. Profitability is currently pressured by higher employee costs and project-specific delays.

EBITDA Margin

EBITDA for Q2 FY26 was INR 77 million, recovering from a loss of INR 9 million in Q1 FY26, but down from INR 273 million in Q2 FY25. Management has revised the FY26 EBITDA margin guidance to 15-16%, down from the previous 16-17% due to a 1% anticipated hit from operational delays.

Capital Expenditure

Planned CAPEX includes INR 25.00 crores for a greenfield assembly unit for water treatment systems, INR 10.505 crores for brownfield expansion at RSSPL, and INR 3.207 crores for new plant and machinery. Additionally, INR 50 crores was utilized for debt repayment in the CEF subsidiary.

Credit Rating & Borrowing

The Debt to Equity ratio improved significantly to 0.24x in FY25 from 0.47x in FY24. The company utilized INR 50 crores from IPO proceeds to prepay/repay outstanding borrowings of its subsidiary, Concord Enviro FZE, to optimize interest costs.

⚙️ Operational Drivers

Raw Materials

Critical inputs include membrane modules, specialized steel components, and chemical treatment agents. While specific cost percentages per material are not disclosed, supply chain risks and price fluctuations in these inputs are identified as key factors impacting production costs.

Import Sources

The company utilizes a diversified supplier base with a focus on multi-sourcing and increasing local sourcing to mitigate supply chain disruptions. Specific countries are not listed, but the company maintains inventory buffers to manage global supply volatility.

Capacity Expansion

Current installed capacity is sufficient to generate INR 1,300 to 1,400 crores in annual revenue. Expansion plans include a new greenfield assembly unit for membrane modules and water treatment plants (INR 25 Cr) and a brownfield expansion of manufacturing and storage facilities at RSSPL (INR 10.505 Cr).

Raw Material Costs

Raw material costs are managed through long-term contracts and digital supply chain visibility tools. The company is actively investing in local sourcing to reduce the impact of price fluctuations and logistics costs on its turnkey projects.

Manufacturing Efficiency

Efficiency is driven by technological innovation in Zero Liquid Discharge (ZLD) and desalination. The company's systems are designed to reduce water consumption and enhance operational efficiency for industrial clients.

📈 Strategic Growth

Expected Growth Rate

12-15%

Growth Strategy

Growth will be driven by a strong H2 order book, expansion into the Compressed Bio-Gas (CBG) plant market which utilizes captive waste, and the 'pay per use' model via the Roserve JV. The company is also investing INR 23.50 crores in technology and new market access initiatives.

Products & Services

Effluent Treatment Plants (ETP), Zero Liquid Discharge (ZLD) systems, Desalination plants, membrane modules, and Operation & Maintenance (O&M) services.

Brand Portfolio

Concord Enviro, Rochem Separation Systems (India) Private Limited (RSSPL), Roserve.

New Products/Services

Expansion into CBG (Compressed Bio-Gas) plants and growing the 'pay per use/pay as treat' business through the Roserve Enviro JV, which received a INR 10 crore investment from IPO proceeds.

Market Expansion

Targeting new markets through a INR 23.50 crore investment in technology and growth initiatives. The company is also expanding its assembly capabilities for membrane modules to serve global water treatment needs.

Market Share & Ranking

India currently accounts for only 2.3% of the global water treatment share, suggesting significant headroom for the company to grow its international footprint.

Strategic Alliances

Joint Venture with Roserve Enviro Private Limited to scale the 'pay per use' business model, providing sustainable water treatment without heavy upfront CAPEX for clients.

🌍 External Factors

Industry Trends

The industry is shifting toward mandatory Zero Liquid Discharge (ZLD) and closed-loop systems driven by ESG mandates. Stricter CPCB norms in India and EPA regulations in the US are forcing high-pollution industries to invest in advanced wastewater recycling.

Competitive Landscape

The company competes with global and local water treatment players, differentiating itself through lower lifecycle costs and specialized turnkey solutions for high-pollution industries.

Competitive Moat

The moat is built on proprietary technological expertise in membrane systems and ZLD, resulting in 12-18% lower energy consumption for desalination compared to competitors, which is a durable advantage in high-utility-cost environments.

Macro Economic Sensitivity

Highly sensitive to industrial CAPEX cycles in sectors like pharmaceuticals, F&B, and chemicals, as well as global sustainability-linked financing trends.

Consumer Behavior

Industrial consumers are shifting from simple wastewater discharge to 'circularity' and water recycling due to increasing freshwater scarcity and rising costs of clean water access.

Geopolitical Risks

International projects, particularly in Africa and Mexico, are subject to local regulatory approvals and civil startup delays, which can postpone revenue recognition.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily influenced by CPCB (India) discharge norms, US EPA regulations, and global ESG reporting standards which mandate higher levels of effluent treatment.

Environmental Compliance

The company's entire business model is built around enabling client compliance with environmental norms like the EU’s Water Framework Directive and India’s CPCB norms.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timing of revenue recognition for large-scale international projects, which are prone to civil and regulatory delays (e.g., current Africa project delays).

Geographic Concentration Risk

Significant revenue is tied to specific large international projects (Mexico, Africa), making the company vulnerable to regional economic or regulatory shifts.

Third Party Dependencies

Dependence on a diversified but critical set of suppliers for membrane modules and specialized components; disruptions could delay project delivery.

Technology Obsolescence Risk

The company mitigates technology risk through continuous R&D and by investing INR 23.50 crores in new technology initiatives to maintain its 12-18% efficiency lead.

Credit & Counterparty Risk

Debtor days improved to 107 in FY25 from 126 in FY24, indicating improving receivables quality, though large project billings still create concentration in receivables.