Incorporated in 2010, EMS is a provider of Sewerage solution, Water Supply System, Water and Waste Treatment Plants, Electrical Transmission and Distribution, Road and Allied works, operation and maintenance of Water and Wastewater Treatment Plants (WWTPs) and Water Supply Scheme Projects (WSSPs) for government authorities/bodies. The treatment process installed at most of the STPs and CETPs is Zero Liquid Discharge (ZLD) compliant and the treated water can be used for horticulture, washing, refrigeration and other process industries. With a team of 57 engineers supported by third-party consultants and industry experts, EMS has completed over 50 projects and has 13 ongoing projects in five states.
In India, the wastewater generation from Class I cities and Class II towns (as per the 2001 census) is estimated as 29,129 MLD, and it is expected to be 33,212 MLD at the current time. Against this, the existing capacity of sewage treatment is only 6,190 MLD. There is still a 79% capacity gap between sewage generation and existing sewage treatment capacity. Another 1742.6 MLD wastewater treatment capacity is being planned or built. Even with this added to the current capacity, there is still a sewage treatment capacity shortfall of 21,196 MLD. With a growing population, there is huge scope for service providers in waste treatment, water treatment, water supply systems and allied services.
Strengths And Risks
+ In-house Team: : EMS has an in-house engineering and design team of 57 engineers with expertise in architectural, structural designs & quality control which reduces dependence on third party consultants.
+ Strong Execution Capabilities:: Since incorporation, EMS has completed more than 50 projects with strong project management and execution capabilities to complete projects on time while maintaining high quality.
+ World Bank Funded Projects: : Almost all the projects are world bank funded through local state govt. bodies. It ensures robust cash flows/timely payments, less debts, which helps them take on more projects, save the finance cost & higher profit margins.
+ Robust Order Book: : EMS has 13 ongoing projects aggregating to an Order Book of Rs. 1,38,909 lakhs & 5 O&M (Operation & Maintenance) projects aggregating into an order book of Rs. 9,928 lakhs.
+ Scalable, Asset Light Business Model: : EMS focusses on joint development agreements or joint ventures, which requires lower upfront capital expenditure. The asset light business model results in efficient utilisation of capital, lower debt and ROCE.
- Project Funding Risk: : EMS bids for WWTPs and WSSPs mostly funded by the World Bank through Central and State Govts.Any reduction in budgetary allocation to this sector may affect the number of projects and business awarded.
- Competitive Bidding: : Their projects are awarded through the competitive bidding process by government bodies. If they are not able to qualify for, compete and win future projects, it could adversely affect business.
- Penalty Risk: : Most agreements they have contain a penalty or liquidated damage clause for delay in the completion of a project. Any delay may cause financial loss or higher debt/working capital risk towards project completion
- Legal Proceeding: : There are outstanding legal cases against company, promoters/directors. The company has also been blacklisted in the past which was lifted later.
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