About Concord Enviro Systems Limited

BUSINESS OVERVIEW

Concord Enviro is a global leader in water and wastewater treatment, specializing in Zero Liquid Discharge (ZLD) solutions. They offer end-to-end capabilities, including designing, manufacturing, installation, commissioning, operation, maintenance (O&M), and advanced digitalization solutions leveraging IoT for real-time monitoring and predictive maintenance. Their solutions are designed to optimize energy use and support water conservation and sustainability goals.

Revenue Streams

1. Systems & Plants: They design, manufacture, and deliver turnkey solutions for effluent treatment plants, membrane-based systems (UF, NF, RO), desalination, and waste heat evaporators.
2. Operations & Maintenance (O&M): Comprehensive management services to ensure optimal performance and longevity of installed systems.
3. Consumables & Spares: Manufacturing and supply of essential components such as membranes, chemicals, and spare parts.

Global Reach and Clientele

With a customer base of 310 as of August 31, 2024, they serve industries including pharmaceuticals, chemicals, food & beverage, defense, energy, automotive, steel, and textiles. Their footprint spans across India and exports to North America, Latin America, Africa, the Middle East, and Southeast Asia. Key clients include Diageo Mexico, Grasim Industries, LANXESS India, and Anthem Biosciences. Noteworthy projects include implementing ZLD solutions for multinational companies in Mexico and the USA.

Infrastructure and R&D

They operate two state-of-the-art manufacturing facilities located in Vasai, Maharashtra, and Sharjah, UAE. Supported by a 25-member R&D team, they focus on developing advanced membranes, innovative processes, and industry-specific solutions to meet evolving customer needs.

By integrating cutting-edge technology and sustainable practices, Concord Enviro delivers customized water management solutions that drive efficiency and environmental stewardship globally. 

As of August 31, 2024, the company had been awarded four patents in India and had filed nine additional patent applications. They have a dedicated sales team of 42 permanent employees in India and UAE. As of August 31, 2024, they had 1,141 employees. The Banker to the Company is ICICI Bank Limited.

INDUSTRY ANALYSIS
Water Scenario of India
To maintain sustainable water resources, withdrawals must be below freshwater replenishment rates. Renewable internal freshwater flows, comprising internal river flows and groundwater from rainfall, are crucial indicators of water security. Per capita renewable freshwater resources depend on the total renewable flows and population size. In many countries, these per capita resources are declining primarily due to population growth. For regions of Africa, EU and the Middle East that have relative less water availability, wastewater treatment opens up a huge opportunity for recycling and reuse of water thereby increasing the water available for different purposes.

The decline in India's per capita water availability is primarily attributed to a range of factors including population growth, climate change, elevated total dissolved solids (TDS) resulting from a lowered water table, and inefficient water management practices. According to Aquastat, India’s per capita water availability was ~1.3K m3 in CY20. Water management is primarily the responsibility of state governments, with the central government providing supplementary support through various schemes.

The total renewable water resources is the sum of internal renewable water resources and external renewable water resources. It corresponds to the maximum theoretical yearly amount of water available for a country at a given moment. Internal renewable resources consist of the average annual flow of rivers and aquifer recharge generated by the country's own precipitation. External renewable resources are the water flows entering the country from upstream nations, including portions of border lakes and rivers, and are governed by international treaties. We see maximum water resources available in South America with 19.2T m3 /year and the lowest is seen in the Middle East with 361B m3 /year. Water resources are scarcest in Africa, the Middle East, and the European Union. However, this scarcity can be alleviated through effective wastewater treatment at both municipal and industrial levels with opportunities in these markets are rapidly expanding.

Industrial Sector Outlook
The outlook for industrial water and wastewater management in India is promising, driven by growing water scarcity, stringent regulations, and the need for sustainable practices. The Indian water and wastewater treatment market valued at US$ 2.1B in FY24 and is expected to grow at a CAGR of 13.5% during the FY24-29 period. Key trends include the adoption of advanced technologies like reverse osmosis membranes, membrane bioreactors, and forward osmosis, as well as the concept of wastewater recycling and zero discharge systems gaining traction in industries such as power, food and beverage, chemicals, and textiles. However, challenges persist, including aging infrastructure, financial constraints, and the need for skilled workforce.

To capitalize on the market potential, India needs to invest in infrastructure upgrades, strengthen regulations, and promote public-private partnerships. Concord, with over 20 years of experience is the one of the major Indian manufacturer of offshore desalination systems, which is well-positioned to contribute to these efforts. With the right strategies and interventions, India can harness its vast potential to become a global leader in industrial water and wastewater management. The future outlook is positive, driven by various initiatives such as setting up desalination plants in coastal areas of Tamil Nadu and Gujarat to meet drinking water and process water requirements, and adopting smart water network solutions that enhance efficiency and reliability through IoT devices and data analytics tools.

The value chain in industrial water and wastewater management encompasses sourcing chemicals, treatment agents, and equipment, along with managing water sources. It involves treating raw water and wastewater through various processes, managing sludge, and ensuring safe disposal or reuse. Key servicessuch as marketing and sales, maintenance, technical support, training, and regulatory compliance assistance play crucial roles. Infrastructure development encompasses designing, constructing, and integrating advanced technologies and monitoring systems, supported by effective human resource and procurement strategies. Concord's product and technology portfolio across the entire value chain of wastewater reuse solutions provides customers with lower costs of ownership during the product life cycle. This approach contrasts with the conventional sum-of-the-parts method, where products and equipment are combined from different manufacturers for building industrial wastewater reuse and Zero Liquid Discharge applications.

The process includes primary, secondary, and tertiary treatments to remove contaminants, with sludge generated being managed and disposed of properly. Treated effluent is safely discharged or reused within industrial processes to minimize water consumption. Advanced technologies and monitoring systems are integrated to enhance efficiency and ensure treatment quality.

India's booming industries are driving demand for effective water treatment. These plants use a multi-stage approach to transform raw water into usable industrial process water. After use, wastewater undergoes treatment to remove pollutants before release or reuse. While basic methods like filtration exist, advanced options like membrane technology are gaining ground. Government regulations and a growing focus on sustainability are pushing industries towards cleaner processes and water reuse strategies. This rapidly developing sector holds promise for efficient water management in India's industrial landscape. There are a total of 1,496 sewage treatment plants in India. 

Indian industrial wastewater recycling/reuse market analysis
In India, wastewater recycling and reuse are gaining traction across various industries as water scarcity and environmental concerns become increasingly pronounced. Industries such as textiles, food and beverage, pharmaceuticals, and manufacturing are implementing wastewater treatment plants to recycle and reuse water for non-potable purposes like cooling, irrigation, and industrial processes. Concord Enviro is an integrated provider of wastewater treatment and zero liquid discharge solutions, with focus upon energy optimization and recovery and their recycling solutions have been supporting these efforts, helping industries achieve water conservation and sustainability goals. Concord Enviro had revenue of INR 285 Cr from industrial wastewater recycling services in FY24. This approach not only helps alleviate water stress but also enhances operational efficiency and reduces environmental pollution.

The wastewater recycling and reuse market in India is in the growth stage, driven by regulations associated with wastewater disposal. The high initial cost of recycling and reuse systems, which has traditionally limited growth, is increasingly outweighed by the higher costs of wastewater disposal and penalties associated with noncompliance. This economic shift is further incentivizing industries to adopt recycling and reuse solutions, thereby fostering broader adoption and development in the sector. With the Indian government emphasizing water conservation and sustainable development through initiatives like the National Water Mission, industries are increasingly recognizing the importance of wastewater recycling and reuse as integral components of their sustainability strategies.

The growth of the zero liquid discharge (ZLD) market is driven by the increasing adoption of these systems, largely due to stringent government regulations on wastewater discharge. Wastewater discharge destabilizes ecosystems and harms water bodies. ZLD systems aim to eliminate all liquid waste from a system, producing clean water suitable for reuse. The captured solid waste can be repurposed for various industrial processes. The clean water obtained from ZLD treatment systems is utilized as a coolant and in various industrial applications such as cooling tower blowdown, boiler blowdown, and oil refinery effluent treatment. Concord, an integrated solutions provider supported by backward-integrated manufacturing facilities and comprehensive wastewater reuse solutions, plays a key role in this sector by offering advanced ZLD systems and technology.

As an integrated water treatment system and plant provider with its own manufacturing facilities and O&M services offering, Concord Enviro is well positioned to capitalise on opportunities in water reuse and ZLD markets in India.

BUSINESS STRENGTHS

1. Leadership in ZLD Technology and Water Conservation : Concord Enviro is among the top two ZLD solutions providers in India (Fiscal 2024) by revenue, supporting industries in achieving water conservation and sustainability goals. With expertise in offshore desalination systems, they are well-positioned to capitalize on global opportunities.

2. Integrated Solutions Provider with Backward Integration : They deliver end-to-end wastewater treatment and ZLD solutions, encompassing design, manufacturing, installation, and O&M services. Their in-house manufacturing of membranes and systems enables customized solutions for industries like pharmaceuticals, chemicals, and automotive. Backed by 25 years of expertise, they leverage data and R&D to ensure high-quality, energy-efficient systems.

3. Strong International Presence : With exports to over 14 countries across North America, Latin America, Africa, and Southeast Asia, they employ a market-specific approach to expand their global footprint. Key international clients include Diageo Mexico and AB Mauri, supported by a commitment to quality and global certifications.

4. Diversified Customer Base : They serve 289 domestic and 21 international customers across industries such as pharmaceuticals, chemicals, food & beverage, defense, automotive, steel, and textiles. This diverse customer base ensures resilience and opportunities for growth.

5. Focus on Innovation and R&D Excellenc : Their R&D team of 25 professionals develops industry-specific membranes, advanced systems, and innovative designs. As of August 31, 2024, they hold four patents in India and have filed nine additional patent applications, reinforcing their commitment to technological advancement.

6. Experienced Leadership and Proven Financial Performance : Led by promoters Mr. Prayas Goel and Mr. Prerak Goel, with over 46 years of combined experience, and supported by a senior management team with 150+ years of expertise, Concord Enviro benefits from strong strategic vision and operational excellence. This leadership drives sustainable growth and expansion into new markets.

BUSINESS STRATEGIES

1. Expand Manufacturing Capacity : To capitalize on the growing global industrial wastewater recycling market (projected to reach $120 billion by 2028), Tthey are enhancing their capacity to manufacture membrane modules, WHE modules, and containerized plants by setting up a new assembly unit near their Sharjah facility.

2. Diversify into New Sectors : They are targeting high water consumption industries like paper mills, refineries, CETPs, power plants, and solar panel manufacturing for their wastewater reuse and ZLD solutions. Leveraging our R&D, they have developed low-pressure membranes tailored for lean wastewater applications in these sectors.

3. Geographic Expansio : They aim to deepen their presence in existing markets and expand into Latin America, Africa, Europe, and Asia, leveraging the growing demand for sustainable water management solutions, particularly in regions with limited water availability.

4. Focus on CBG Plant Installation : Utilizing their anaerobic digestion expertise, they entered the compressed biogas (CBG) segment in 2024. These plants convert organic waste into renewable energy, addressing the demand for sustainable and clean energy solutions.

5. Cross-Sell Products to Existing Customer : They intend to promote products like anaerobic digestors, membrane bio-reactors, and IoT management systems to existing clients, leveraging their strong customer retention and repeat business relationships.

6. Grow “Pay as You Treat” Mode : To address market needs in APAC driven by urbanization and water scarcity, they offer tailored wastewater solutions under a rental model. This service allows customers to avoid capital expenditure while benefiting from their operation and maintenance services.

BUSINESS RISK FACTORS

1. Revenue Concentration on Top Customer : A significant portion of Concord Enviro's revenue (over 50%) comes from its top 10 customers, making the company heavily reliant on a limited client base for sustained operations.

2. Dependence on Research and Development (R&D : The company relies on R&D efforts and technical expertise to develop innovative waste treatment technologies. Its future growth depends on timely and cost-effective product advancements

3. Health, Safety, and Environmental Risk : Operations in industrial water and wastewater treatment expose the company to risks such as hazardous gases, chemicals, and physical hazards, posing potential safety threats to workers.

4. Rapid Technological Change : Water reuse and zero liquid discharge technologies are evolving rapidly. Failure to adapt to technological advancements or shifts in market demand may render current products obsolete, impacting revenue and operations.

5. Seasonality of Sale : Sales of systems and plants are seasonal, with significant activity in the last quarter of the fiscal year due to customer budget cycles and water preparation for summer, leading to fluctuations in revenue.

6. Reliance on Three Business Vertical : Revenue streams are dependent on three key verticals: systems and plants, consumables and spare parts, and O&M services. Any downturn in these verticals can directly affect financial performance.

7. Recurring Revenue from O&M Busines : The company depends on recurring revenue from its O&M services, which form a stable but critical portion of its operations and profitability.

8. Project Award Dependencie : The company’s growth is tied to securing project awards through tenders, which are often unpredictable, subject to delays, and vulnerable to scope changes, cost overruns, and competitive pressures.

NOTE : Concord Enviro faces operational challenges due to reliance on key customers, R&D-driven innovation, and environmental risks. Seasonal demand, dependency on O&M revenue, and uncertainties in project awards further add to its vulnerabilities. Diversification and proactive risk management are critical for its sustained growth and resilience.