WPIL Eyes Stronger H2 Growth and Margin Normalization

Ashwin Thakker

— 1 min read

Key Facts:

  • Full year revenue guidance aligns with Q1 performance, with international revenue growth to be sustained.
  • International business margins, impacted by Q1 one-off costs, are projected to normalize to 15% and potentially higher in subsequent quarters.
  • Overall EBITDA levels are expected to improve as legacy and acquisition costs normalize.
  • Domestic business is anticipated to contribute approximately 50% of the total revenue going forward, with a potential uptick in Q2 margins.
  • The Jal Jeevan Mission sector is expected to see normalized payments and fresh tenders in the second half of the fiscal year.

WPIL Limited's Q1 FY26 earnings call signals a clear path for future growth and improved profitability. Despite initial impacts from recent acquisitions and legacy costs, management provides forward-looking insights, highlighting sustained international revenue, normalizing margins, and a strengthening domestic outlook, particularly in the water sector.

Sustaining Revenue Growth and Market Expansion

WPIL Limited anticipates continued robust revenue performance, building on its strong Q1 FY26. The international segment, notably growing from INR 120 crores to INR 197 crores, is projected to sustain this growth through the year. Management stated,

"this growth should be maintained throughout the year."

This momentum, fueled by recent acquisitions, expects its peak in the second and third quarters. Domestically, the company targets a 50% revenue contribution, forecasting improved activity from the Jal Jeevan Mission with fresh tenders in the second half of the fiscal year.

Margin Normalization and Profitability Uplift

WPIL's profitability is set for improvement, with management guiding towards margin normalization after Q1 impacts. The Executive Director noted,

"margins were affected by transaction and legacy costs in the first quarter, but are expected to improve and normalize through the year."

International business margins, which temporarily dipped to 11% due to one-off acquisition costs (around INR 100 crores), are expected to rebound to 15% and potentially higher. Overall, the company projects EBITDA levels to normalize and increase as higher-margin international acquisitions fully integrate. The domestic segment is also poised for a margin uptick in Q2, contributing to a stronger profitability profile.

WPIL Limited's outlook for FY26 is one of cautious optimism, anchored by anticipated revenue stability, especially in the international segment, and a clear path to margin recovery. The company's focus on integrating acquisitions, resolving domestic project backlogs like the Jal Jeevan Mission, and optimizing operational efficiencies positions it for a stronger second half. Investors can anticipate a more normalized and elevated profitability profile as the year progresses.

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