One of the hidden gem stocks engaged in providing turnkey services in water and wastewater collection, treatment, and disposal. The company provides complete, single-source services from engineering and design to construction and installation of water, wastewater, and domestic waste treatment facilities. The stock has given a one-year return of 63.62 percent.
Stock Movement:
With a market capitalization of Rs. 4,116.22 crores, the shares of EMS Limited were trading at Rs. 741.25 per equity share, rising nearly around 0.24 percent from its previous day’s close price of Rs. 739.20.
Long-Term Gain:
On September 22, 2023, the shares of EMS Limited were trading at Rs 267.70, exhibiting a gain of around 176.90 percent compared to the current price. For example, if someone had invested Rs. 1 lakh into the company’s stock 1.5 years ago, it would have turned to ~Rs. 2.77 lakhs.
About the company:
EMS is a multi-disciplinary EPC company with over 13 years of expertise, specializing in water and wastewater infrastructure. The company excels in providing EPC and O&M services, with unique end-to-end competence in sewerage laying works and STP.
The company has delivered 16 projects since April 2021, employing 488 staff, including 95 engineers. As an ISO 9001:2015 certified organization, the company manages World Bank-funded projects through local and state governments.
Order Book and Pipeline:
EMS Limited maintains a robust order book with strategic project execution through select joint ventures for qualification enhancement. The company is well-positioned to capitalize on upcoming Amrit scheme projects, with bid results expected shortly.
EMS Limited shows significant market expansion with its entry into West Bengal through a prestigious Rs. 700 crore sewerage project in Kolkata. The company’s current unexecuted order book stands at a substantial Rs. 2,345 crore, which includes Rs. 170 crore dedicated to operation and maintenance contracts, reflecting a strong business pipeline.
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Future Outlook:
The company projects a confident 25% year-on-year growth trajectory, strategically acquiring land through NCLT proceedings to strengthen banking collateral. While EMS Limited has prepared documents for future equity fundraising, it prioritizes organic growth and actively seeks an independent CFO to enhance its management capabilities.
Geographical Footprint:
The company maintains a strategic presence across 6 Indian states, with Uttar Pradesh contributing the highest revenue share at 47%, followed by Bihar at 19%, Maharashtra at 16%, Rajasthan at 12%, and Uttarakhand at 6%, demonstrating a strong foothold in northern India.
Shareholding Pattern:
In September 2024, EMS Limited had a majority stake held by the promoters at 69.70 percent, foreign institutional investors at 0.75 percent, domestic institutional investors at 1.08 percent, and the public at 28.46 percent.
Recent quarter results and ratios:
EMS Limited’s revenue has increased from Rs. 211 crore in Q2 FY24 to Rs. 233 crore in Q2 FY25, which has grown by 10.43 percent YOY. The net profit of EMS Limited has also grown by 11.11 percent, from Rs. 45crore in Q2 FY24 to Rs. 50 crore in Q2 FY25.
EMS Limited’s revenue and net profit have grown at a CAGR of 24.89 percent and 20.74 percent, respectively, over the last four years. In terms of return ratios, the company’s ROCE and ROE should be 29.3 percent and 22.9 percent, respectively. The debt-to-equity ratio of the company is to be 0.09x. EMS Limited’s EPS is to be Rs. 30.9.
Written By – Nikhil Naik
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