A leading powerhouse in wastewater management and treatment solutions has continued to demonstrate exceptional financial performance, standing out with an impressive 29% operating profit margin in Q3. This industry frontrunner’s remarkable profitability, coupled with a robust 20% profit margin, signals strong operational efficiency and hints at potential market opportunities for investors seeking stable growth in the environmental services sector.
Share Price Movement
The share price of EMS Limited went down 1.12 percent to Rs. 795.65 per share on Thursday, a decrease from its previous close of Rs. 804.70 per share. The market capitalisation now stands at approximately Rs. 4,431 crore as of January 30, 2025.
Q3 Financial Highlights
In Q3 FY25, the company reported a revenue of Rs. 245 crore, reflecting a 22.5% YoY growth from Rs. 200 crore in Q3 FY24 and a 5.2% QoQ increase from Rs. 233 crore in Q2 FY25. Net profit rose to Rs. 51 crore, marking a 37.8% YoY growth from Rs. 37 crore in Q3 FY24 and a marginal 2% QoQ rise from Rs. 50 crore in Q2 FY25.
Ratios & Margins
In Q3 FY25, the company’s operating profit margin (OPM) rose to 28.4% from 25.3% in Q3 FY24, while the net profit margin (NPM) declined to 20.8% from 25%. Over the trailing twelve months, the company achieved a profit CAGR of 31%, sales CAGR of 26%, and ROE CAGR of 23%, reflecting strong financial growth.
Competitors
Va Tech Wabag Ltd and Ion Exchange (India) Ltd specialise in water treatment and management solutions, competing in the infrastructure sector. Antony Waste Handling Cell focuses on waste management, adding to the industry’s environmental solutions landscape.
EMS has a P/E of 23.34, which is higher than industry P/E of 22.16.
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Market Outlook
India’s rapid urbanisation is driving high demand for fresh water and doubling wastewater generation in cities compared to rural areas. Government initiatives like the Namami Gange Programme, Swachh Bharat Mission, and Jal Jeevan Mission are boosting wastewater treatment, water reuse, and rural water access.
Predominantly B2G, this sector benefits from World Bank-funded projects, ensuring effective execution and secure payments. The 2024-25 budget emphasises welfare schemes, providing significant opportunities in water, wastewater, and irrigation infrastructure development, aligned with India’s “Viksit Bharat 2047” vision.
About EMS
EMS Limited excels in providing comprehensive turnkey solutions for wastewater management, covering engineering, design, construction, and installation. It integrates long-term operations and maintenance contracts for sustained support, undertakes large-scale municipal projects, and expands into Tier-2 and Tier-3 cities to address growing urbanisation needs.
Written By Fazal Ul Vahab C H
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