SS-7

EMS limited

CMP 569, Market cap ~3150cr

ROCE ~32%, ROE ~24%, D/E ~0.07 PE ~29 (based on screener)

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🟢EMS Limited is a multi-disciplinary EPC company, headquartered in Delhi that specializes in providing turnkey services in water and wastewater collection, treatment and disposal. EMS provides complete, single-source services from engineering and design to construction and installation of water, wastewater and domestic waste treatment facilities

🟢The company provides Sewage solutions, Water Supply Systems, Water and Waste Treatment Plants, Electrical Transmission and Distribution, Road and Allied works, operation and maintenance of Wastewater Scheme Projects (WWSPs) and Water Supply Scheme Projects (WSSPs) for government authorities/bodies.

🟢Healthy Order book of ~2100cr provides strong visibility of revenues over next few years. Company has repeat orders from various Government departments.

🟢EMS promoters have more than a decade of experience in executing water supply and sewage treatment projects

🟢Since incorporation, it has completed 67 projects in Bihar, Uttarakhand, Madhya Pradesh, Rajasthan, and Haryana. It has executed many projects awarded by government bodies such as Uttar Pradesh Jal Nigam (UPJN), Construction and Design Services (C&DS), Military Engineering Services (MES), and Indian Railway Construction Limited (IRCON). It has completed 4 O&M projects in last 4 years.

🟢Key clientele includes government bodies like Municipal corporation of Rajasthan (under AMRUT Scheme), Uttarakhand Urban Sector Development Agency and Bihar Urban Infrastructure Development Corporation (under National Mission for Clean Ganga ) and CPWD, Maharashtra

 🟢EMS Limited has its own civil construction team and employs 57+ engineers, supported by third-party consultants and industry experts.

🟢Projects are mostly funded by World bank

🟢Development of Tier 2 Tier 3 towns, capital expenditure by Government gives good visibility for few years

🟢Promoter has sufficient skin in game with approx. 70% holdings, Sales are increasing and NPM is good

Risks

🔴Company works in a field of high capital intensive business and receivables will remain high

🔴Project execution risks within a budget are the ones which constantly hurts companies in these kind of businesses

🔴The company has not executed any HAM projects in the past but is executing one HAM project for the UP Jal Nigam. It has entered a joint venture with Ercole Marelli Impianti Tecnologici S.R.L. Italy.

🔴Revenue concentration from few clients/states poses a risk

Technical chart

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