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Business Review Water Treatment
BUSINESS PERFORMANCE
Performance Overview
Triveni Water Business (WBG) is present in both industrial and municipal segments, with focus on providing wastewater treatment solutions. It is pursuing opportunities with Namami Gange (National Mission for Clean Ganga), UP Jal Nigam, Delhi Jal Board, Bangalore Municipality, and various other clients in Engineering Procurement Construction (EPC) and Hybrid Annuity Model (HAM) / Public Private Partnership (PPP) projects. WBG is also exploring PPP format for Sewage Treatment Plant (STP) recycling opportunities.
At present, the Water Business is executing 12 EPC jobs located in Delhi, UP, Karnataka, Odisha, West Bengal, Tamil Nadu, Rajasthan and Punjab.
The business activities of WBG picked up during FY 20 due to the strong carry forward order book. The business recorded its historical highest annual turnover of ₹305.9 crore, with PBIT of ₹24 crore, in the year under review. The order in-take for FY 20 was ₹39.3 crore while the carry forward order book as on March 31, 2020 was ₹995.3 crore, including O&M orders for ₹482.9 crore. The operating efficiency also improved significantly during the year as the indirect cost remained almost at the level of the previous year despite 22.7% increase in annual turnover.
Going forward, majority of investments in this business are expected from the Central Government through NMCG and Japan International Cooperation Agency (JICA), besides State funding from Karnataka, UP, Delhi, MP, Bihar, Jharkhand and Rajasthan. WBG is well positioned to undertake more jobs in its chosen areas of expertise. Though the business is not actively looking to expand in the foreign market, it will continue to evaluate opportunities in neighbouring countries on case-to-case basis.
Key Highlights
1. WBG achieved historic high annual turnover of ₹305.9 crore in FY 20
2. Secured overseas order from Maldives for Reverse Osmosis (RO) and STP package in Joint Venture (JV) with an export firm
3. Completed EPC of 15 MLD RO Plant within the allotted time, and successfully conducted PG Test and handed over the plant to Barmer Lignite Mining Company Limited (BLMCL)
4. Near completion of 40 MLD STP based upon Sequencing Batch Reactor (SBR) technology for Bangalore Water Supply and Sewerage Board (BWSSB)
5. Near to completion of 210 MLD ISPS project for BWSSB
6. NTPC Darlipali PG test for PT-DM package completed
7. Regular participation in new bids, positioning the Water business as a major recognised force in the industry
Impact of COVID-19 on Business Performance
Due to COVID-19 notifications from Government of India and various State Governments, all WBG sites were shut down, and supply chain was disrupted, resulting in loss of revenue to the extent of approximately ₹35 crore on account of the following:
1. Several supplies were ready for despatch but could not move due to lockdown
2. Several supplies were ready for inspection, which had to be cancelled due to lockdown
3. Some overseas supplies reached Jawaharlal Nehru Port Trust post but the Government of India closed the post, thus preventing equipment delivery at site
4. Raw material for site works held up due to lockdown and complete stoppage of works
Outlook
During FY 20, the performance of WBG from order intake perspective was muted due to slow pace of order finalisation, largely due to Central and State elections. However, prospects for the Water sector are positive for FY 21, and major projects are expected to be finalised by NMCG, JICA and State Governments. Apart from new tenders of regular EPC and HAM projects, several tenders for retrofitting and refurbishments are expected to be floated due to NGT’s revised discharge standards of STPs in metropolitan and other areas.
Due to prevailing Coronavirus (COVID-19) pandemic, the Government’s focus and funding is expected to be diverted towards fighting the pandemic and there could be delays in its ability to allocate funds for new projects. The Company expects some subdued activities in new business opportunities in FY 21 and the business is gearing-up to tackle these issues.
AMRUT funding, majorly from the Central Government, may catalyse opportunities in the Water sector. JICA is funding new Water projects in Delhi and Karnataka, and new bids from these states are expected. CETPs for industrial clusters like textile and tannery are being built, mainly due to intervention of NGT, and it is expected that some more opportunities will arise in FY 21. Focussed initiatives of the Central Government will be instrumental in driving the way forward for the Water and Wastewater business for the next 4 years.
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