CompanyReport

WPILLtd.
April21,2017 BUY MEDIUMRISK PRICERs.435TARGETRs.525
WPIL is one of the leading players in the organized market with vast experience in Designing,
Manufacturing, Commissioning & Servicing of Pumps & Pumping Systems catering to all the
PUMPS major sectors including Irrigation, Power, Industrials etc. The Company also provides turnkey
execution for water handling projects in all the above sectors by leveraging its engineering
capabilities&experience.
SHAREHOLDING(%)

Promoters 61.1
WerecentlyhadaconferencecallwiththemanagementofWPILLtd.whichwasrepresented
by Mr.K.K.Ganeriwala (ED) in order to have better insights on the industry dynamics &
FII
companysgrowthprospects.Thefollowingarethekeytakeaways.
FI/MF 18.4

BodyCorporate Healthy Orderbook Position The domestic orderbook position of the Company stands
Public&Others 20.5 healthy at Rs.10 bn (~4.7x FY16 Std. Rev.) providing good revenue visibility over the next few
years. Of the total orderbook position, Engineered Pumps contributes ~Rs.22.5 bn (market

share ~25%) while EPC (turnkey) contributes ~Rs.67 bn; rest comes from traditional pumps.
STOCKDATA Aftermarketservicescontributes~1820%tothetopline.ExecutioncycleforEngineeredpumps
& EPC projects stands at 1824 months & 3648 months respectively. Moreover, the Company
ReutersCode WRTH.BO hasoutstandingbidstothetuneofRs.10bnwhichislikelytoopenovernextfewmonths.
BloombergCode WPIIN
UtilizationstoimprovegoingforwardSlowdownineconomyresultedinlowerorderinflows
BSECode 505872
impactingrevenueswhichdegrewataCAGRof~8%overFY1216toRs.2120mn.Howeverwith
NSESymbol improvement in ordering scenario, the Company witnessed healthy topline growth of ~16% in
9MFY17 toRs.1600 mn. Currentcapacity utilization stands lower at ~50% which is expected to
Market Rs.4245.6mn
improve going forward resulting in some margin improvement on back of operating leverage
Capitalization* US$65.7mn benefits.
Improving Domestic Scenario Management indicated towards improvement in domestic
Shares scenariowithcomparativelyhighertendering&improvinggroundlevelactivities.Consideringthe
9.8mn
Outstanding* hugepotentialintheirrigationsector,theyexpectlotofinvestmenttoflowinoverthenext34
years. Many states like AP, Telangana, Maharashtra etc. have planned huge expenditure in
52Weeks(H/L) Rs.485/315
Irrigationsector.
Avg.Daily Turnaround of Subsidiaries In order to pursue growth & diversify in newer products, the
10,885Shares
Volume(6m) CompanywentformanyoverseasacquisitionsincountrieslikeAustralia,Africa,Europe,UKetc.
over the last couple of years. Fall in commodity prices has been one of the major reasons for
PricePerformance(%) underperformance by subsidiaries since majority of economies where subsidiary operates are
1M 3M 6M commodity dependent. However, with revival in commodity prices, management expects
economies to perform better going forward. Orderbacklog for majority of its subsidiaries has
3 8 20
improved&isatcomfortablelevels.TheCompanyderives~70%ofitsrevenuesthroughexports
200daysEMARs.398 &hencerevivalofsubsidiarieswouldaugerwellfortheCompanygoingforward.

*Onfullydilutedequityshares
Other Key Points 1) Capex The Company has already incurred good capex for its Nagpur
plant&isfurtherexpectedtospend~Rs.150200mnoverthenext12years.2)TheCompanyis
also focusing on Water management segment (mainly municipalities) which can provide good
opportunities.IthasbidforfewprojectsinstateslikeJ&K,Rajasthanetc.
KeyRisks1)Delayineconomicrecovery2)Aggressiveoverseasacquisitions
OUTLOOK&VALUATION

WPIL with major focus on Engineered Pumps & EPC contracts has its fortunes linked to the
economy. Slowdown in economy resulted in lower orderinflows impacting growth & margins.
Also, underperformance by subsidiaries due to turmoil in overseas markets led to additional
pressure on profitability. However, with improving ordering scenario in domestic & overseas
markets,theCompanyislikelytohavebettergrowthvisibilitygoingforward.Likelyturnaround
ofsubsidiariescoupledwithoperatingleveragebenefitscanresultinbetterprofitabilitygrowth.

KEYFINANCIALS
ANALYST Y/E Revenue APAT AEPS AEPS P/E ROCE ROE P/BV
ShreyasBhukhanwala|+912240934078
Mar. (Rsmn) (Rsmn) (Rs) (%Ch.) (x) (%) (%) (x)
shreyas.bhukhanwala@sushilfinance.com
FY14 5,110.5 302.2 37.9 (26.2) 11.4 23.8 24.5 2.6
FY15 4,830.2 184.9 18.9 (50.1) 23.0 16.6 9.6 1.7
FY16 7,309.2 10.1 1.0 4.7 0.4 1.7

Pleaserefertoimportantdisclosuresattheendofthereport ForprivateCirculationOnly.

SushilFinancialServicesPrivateLimited Member:BSEL,SEBIRegn.No.INB/F010982338|NSEIL,SEBIRegn.No.INB/F230607435.
Regd.Office:12,HomjiStreet,Fort,Mumbai400001. Phone:+912240936000Fax:+912222665758Email:info@sushilfinance.com
 WPIL Ltd.

RatingScale
This is a guide to the rating system used by our Institutional Research Team. Our rating system comprises of six rating categories, with a
correspondingriskrating.
RiskRating
RiskDescription PredictabilityofEarnings/Dividends;PriceVolatility
LowRisk Highpredictability/Lowvolatility
MediumRisk Moderatepredictability/volatility
HighRisk Lowpredictability/Highvolatility

TotalExpectedReturnMatrix
Rating LowRisk MediumRisk HighRisk
Buy Over15% Over20% Over25%
Accumulate 10%to15% 15%to20% 20%to25%
Hold 0%to10% 0%to15% 0%to20%
Sell NegativeReturns NegativeReturns NegativeReturns
Neutral NotApplicable NotApplicable NotApplicable
NotRated NotApplicable NotApplicable NotApplicable
PleaseNote
RecommendationswithNeutralRatingimplyreversalofourearlieropinion(i.e.BookProfits/Losses).
**IndicatesthatthestockisilliquidWithaviewtocombatthehigheracquisitioncostforilliquidstocks,wehaveenhancedourreturncriteriaforsuchstocksbyfive
percentagepoints.
StockReviewReports:TheseareSoftcoveragesoncompanieswhereManagementaccessisdifficultorMarketcapitalizationisbelowRs.2000mn.Viewsand
recommendationonsuchcompaniesmaynotnecessarilybebasedonmanagementmeetingbutmaybebasedonthepubliclyavailableinformationand/orattending
CompanyAGMs.HenceStockReviewsmaybejustonetimecoverageswithanoccasionalUpdate,whereverpossible.

ResearchAnalystSEBIRegistrationNo.INH000000867

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