VA Tech Wabag Expects Strong Order Book To Drive Revenue For Next Three Years
Andhra Pradesh projects and implications of Ind-AS dented receivables, says Va Tech Wabag’s Rajiv Mittal.
VA Tech Wabag Ltd.’s Rs 11,500-crore order book is expected to drive revenue for the next three years. That’s according to its Managing Director and Group Chief Executive Officer Rajiv Mittal.
“We have already got Rs 3,000-crore worth orders in the first half of current year and expect to add another Rs 2,000 crore to meet our fresh order intake guidance,” Mittal told BloombergQuint in an interview. The firm said its key international projects concentrated in the Middle East and Africa, including sewage treatment for 2022 FIFA World Cup stadium in Qatar.
The water treatment firm admitted its Europe market was “saturated” whose experience and technologies are, in turn, used to execute projects in the emerging economies.
Receivables Inching Up
The firm said its Rs 2,000-crore Andhra Pradesh Power Generation Corporation Ltd. projects and implications of Ind-AS had dented its receivables. VA Tech Wabag was forced to take control of the Andhra Pradesh Power Generation project five years ago as it was the only company to remain liquid in the consortium that won the order, Mittal said. “It has put a strain on the balance sheet on account of 20 percent retention money which can be recovered only after completion of projects.”
In October, the company had said its receivables outstanding as of FY19 were Rs 1,708 crore, with eight of its customers accounting for 62 percent of receivables. Nearly a fourth of its receivables are due from certain projects in Andhra Pradesh and Telangana that it had executed along with a consortium. “The good news is we have completed one project while the other one is in the advanced stage of completion,” he said.
Shares of the Chennai-headquartered company gained 3.4 percent on Monday compared to a flat Nifty Index.
Watch| VA Tech Wabag Clarifies On Its Receivables Pile Up