Around 75% of waste generated in India is openly dumped without proper treatment or processing. Municipal corporations, initially responsible for waste collection, are increasingly privatizing these services due to inefficiencies. This trend is driving the growth of the private waste management sector, presenting a massive opportunity for organized waste management companies.
Antony Waste Handling Cell Limited (AWHCL) is well-positioned to benefit from the increasing demand for efficient waste management solutions in India, driven by rapid urbanization and strong economic growth.
The company has a proven track record of success in the Collection & Transportation (C&T) and Processing of Municipal Solid Waste (MSW), along with a strong management team and a de-risked business model.
| Particulars(Rs in Cr) | TTM FY25 | FY27E |
| Sales | 901 | 1158 |
| EBITDA | 180 | 266 |
| OPM % | 20% | 23% |
| EV/EBITDA | 9.78 | 10 |
| EV | 2666 | |
| DEBT | 429 | |
| CASH | 82 | |
| MARKET CAP | 1666 | 2149 |
| Upside(%) | ~30% |
Why should you invest?
- From B2G to B2C: Antony Waste is strategically shifting towards a Business-to- Consumer (B2C) model in specific locations like Noida, Jhansi, Varanasi, and This involves collecting waste management fees directly from end-users, including residential societies, malls, and commercial complexes. This shift is anticipated to mitigate receivable challenges and potentially enhance the company’s valuations.
- Revenue Visibility: Antony Waste’s long-term contracts, spanning 7-8 years for C&T and over 20 years for Processing segment, provide strong revenue visibility, making it an attractive investment proposition.
- Entry Barriers: The waste management sector has significant entry barriers due to the capital-intensive nature of projects, regulatory complexities, and counterparty risks, limiting competition.
- De-risked Business Model: The company’s business model is de-risked through staggered revenue streams, project diversification across timelines and activities, and a focus on municipalities with stable financials.
- Growth Through Diversification: The company’s strategic move to diversify into new business areas is key to unlocking additional growth avenues.
- Revenue Growth: AWHCL has exhibited consistent revenue growth over the years, with total revenue reaching INR 4 crore in FY24 from INR 284 Crore growing @ CAGR of 25%. This growth is attributed to volume increases in both the C&T and Processing sectors. Management expects this growth to continue, driven by:
- New Project Wins: AWHCL continues to secure new contracts, including those for C&D (Construction & Demolition) waste management and mechanical sweeping projects.
- Expansion into New Geographies: The company is looking to expand into new regions within India, further bolstering its revenue base.
- Increasing Waste Generation: Rising urbanization and consumption trends in India are expected to contribute to a sustained increase in waste generation, creating further demand for AWHCL’s services.
- Margin Expansion: AWHCL’s management anticipates continued EBITDA margin expansion, supported by operational efficiencies, strategic focus on higher-margin projects, and economies of scale.
Profit & Loss Statement
| Particulars | Mar- 19 | Mar- 20 | Mar- 21 | Mar- 22 | Mar- 23 | Mar- 24 | TTM | CAGR @ 5 YEAR |
| Sales | 284 | 451 | 465 | 648 | 854 | 873 | 901 | 25% |
| Expenses | 207 | 325 | 350 | 500 | 706 | 695 | 721 | |
| Operating Profit | 76 | 126 | 115 | 148 | 148 | 178 | 180 | 19% |
| OPM % | 27% | 28% | 25% | 23% | 17% | 20% | 20% | |
| Other Income | 15 | -4 | 16 | 18 | 20 | 24 | 26 | |
| Interest | 25 | 30 | 28 | 20 | 27 | 40 | 55 | |
| Depreciation | 18 | 24 | 31 | 33 | 39 | 53 | 68 | |
| Profit before tax | 48 | 67 | 71 | 113 | 102 | 109 | 83 | |
| Tax % | 27% | 30% | 9% | 20% | 17% | 8% | ||
| Net Profit | 35 | 47 | 64 | 90 | 85 | 100 | 85 | 23% |
ABOUT THE COMPANY
AWHCL is among India’s top waste management firms with > 2 decades of operation experience. Since its inception, the company has handled close to 17.98 million metric tonnes (MMT) of waste and 4.46 MMT in FY24.
To put this in perspective
- Ramky Enviro Engineers, one of AWHCL’s leading competitors, processes ~6 million tonnes per year.
- Local competitors such as Metro Waste Handling Pvt and BVG India primarily handle smaller regional projects, processing less than 2 million tonnes annually in aggregate.
The company has executed projects in 9 states, worked with 23+ municipal corporations, and has 10,000 + employees. The company has 35+ completed & on-going projects.
The company’s reputation secures long-term contracts with premier municipal corporations like Brihanmumbai Municipal Corporation and Pimpri Chinchwad Municipal Corporation.
Business Overview
AWHCL operates across three primary business segments:
Municipal Solid Waste (MSW) Collection & Transport:
This segment involves collecting waste from households, commercial, and industrial sources and transporting it to designated dumping sites or processing facilities. The company currently has 16 on-going contracts.
Antony Waste acquires long-term contracts, typically spanning 7-8 years, through a competitive bidding process and the Compensation is provided through a tipping fee that often incorporate provisions for passing through costs like fuel and labor, mitigating the impact of fluctuating expenses.
The growth from this segment is projected at 18-20%, contributing 62% to the topline Q2FY25 and the key growth driver in this segment will be winning contracts in new regions
Pan-India Presence: Antony Waste boasts a robust geographical footprint, holding C&T contracts in various locations across India. These include Thane, Navi Mumbai, Mangalore, Greater Noida, Mumbai (across multiple wards), Pimpri Chinchwad, Nagpur, Varanasi, Jhansi, North Delhi, Nashik, and Panvel.
Spotlight on the Panvel Contract: They recently secured contract in Panvel is particularly noteworthy. Spanning five years, with a potential extension of two years, this contract is projected to generate around INR 376 crores in revenue. It entails a daily processing volume of 400-420 Tons Per Day.
MSW Processing:
This segment encompasses the processing of waste received from C & T through methods like bio-methanation, composting, RDF (Refuse Derived Fuel) production, and Waste-to-Energy (WtE) plants.
This segment contributes almost 23% to the topline as of Q2FY24.
Antony Waste deploys two main processing methods:
- Anaerobic Process (Kanjurmarg, Mumbai) – Bio reactor landfill technology-
- Waste is meticulously managed within designated cells for a period of 5-6 The degraded waste is then subjected to mining and sorting in the Kanjumarg site in Mumbai. This process yields methane gas, a valuable resource. The extracted methane gas is utilized for generating electricity which the company further sells to the government at 5 Rs Per Unit after having the units saved for captive consumption.
- The company is owner of one of the largest single-location waste processing plants in The Kanjurmarg site in Mumbai which handles ~5,800 TPD of Solid waste with a total capacity of handling ~7,500 TPD of waste. The site handles ~90% of total waste generated in Mumbai.
- Aerobic Process – Material recovery and composting facility
- Incoming waste is segregated into compostable, combustible, and recyclable materials, optimizing resource recovery.
- Recyclable materials are sold to recycling facilities, generating additional revenue
- Combustible waste is processed into Refuse Derived Fuel (RDF) through shredding and compression.
- The produced RDF is sold to cement and steel plants as an alternative fuel
Contacts and Others:
Revenue includes from mechanical sweeping contracts using automated trucks for road cleaning, sale of goods, and from sale of scrap
DBOOT Projects: A Unique Business Model Approach:
Antony Waste undertakes Design, Build, Operate, Own, and Transfer (DBOOT) projects, demonstrating its long-term vision and commitment to infrastructure development.
Long-Term Contracts: DBOOT projects involve long-term contracts, typically exceeding 20 years, for waste processing plants. Upon contract completion, ownership is transferred back to the government.
- Kanjurmarg Plant: A DBOOT Success Story: The Kanjurmarg plant exemplifies a successful DBOOT The land was provided by the municipal corporation, with Antony Waste responsible for building, operating, and owning the plant until the contract concludes in 2036. After this period, the plant will revert to government ownership.
- Pimpri Chinchwad Plant: Waste-to-Energy Innovation:
- The Pimpri Chinchwad project showcases Antony Waste’s foray into waste-to- energy initiatives.
- Power Generation: The plant is designed to generate 14 MW of Power
- Internal Consumption and Sales: 5 MW is allocated for internal consumption, while the remaining 11.5 MW is sold to PCMC at a fixed rate of INR 7 per unit.
- Waste Processing Capacity: The plant has a substantial waste processing capacity of 1,000 TPD.
- Phased Implementation: The project was executed in two phases: Phase 1 focused on waste dumping, and Phase 2 concentrates on electricity
- Revenue Projections: Annual revenue from the project is estimated to be between INR 40 and 50 crores, contingent on the plant’s power factor.
- This project involved a substantial CAPEX of INR 246 crore, implemented between 2019 and 2024.
- Accounting Implications: The CAPEX associated with DBOOT projects is progressively recognized as revenue in the profit and loss (P&L) This recognition is based on the project’s Internal Rate of Return (IRR).
DBOOT Projects – ROE Dynamics:
- Asset Turnover: DBOOT projects typically exhibit an asset turnover of 3 to 0.4 times.
- EBITDA Margin: These projects boast a robust EBITDA margin of 50-55%.
- Estimated ROE: The estimated ROE for DBOOT projects falls within the range of 15-20%. This figure has the potential to be even higher when factoring in debt
Diversification (Expanding Horizons): The company is actively pursuing diversification by venturing into new business areas, such as:
- Auto Scrap Processing: Capitalizing on the growing market for auto scrap, Antony Waste is venturing into processing end-of-life vehicles.
- Tire Recycling: Recognizing the environmental concerns associated with tire disposal, the company is exploring opportunities in tire recycling.
- Infrastructure Debris Processing: Antony Waste is tapping into the market for processing construction and demolition debris, aligning with sustainable development
- Potential Future Expansion: Potential future expansion into areas like medical waste management and plastic bottle recycling, further widening the company’s
- Bio-mining: Unlocking Value from Legacy Waste: Antony Waste has successfully executed a bio-mining project in Noida and recently secured a lucrative INR 77 crore contract for a similar project in Bio-mining represents a significant untapped opportunity due to the presence of vast quantities of legacy waste in landfills across India.
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