Banka Bioloo is a Rs. 176 crore market capitalisation company with a large socio-economic impact while also serving its capitalistic ambitions. This 12-year young company, provides decentralized sanitation solutions through its for-profit, Banka Bioloo and non-profit, Banka Earth. We spoke to Sanjay Banka, Chairman, Banka Bioloo on the mission, the business model and the company’s targets in the medium term, which includes a very ambitious plan to double its revenue from Rs. 45-50 crore currently to Rs. 100 crore in the next 1-2 years.
Sanjay Banka laments the state of WaSH i.e. drinking water, sanitation and hygiene facilities in the world. 3.5 billion people are said to lack safely managed sanitation services in 2022. A whopping 1 million have died due to unsafe WaSH conditions in 2019. Through Banka Bioloo’s decentralized sanitation solutions, Sanjay Banka hopes to prune these numbers considerably, thereby truly combining the ethos of social services with the profits from a capitalistic enterprise.
Based in Telangana, Banka Bioloo’s key products and services include Bio-toilet, a toilet cabin with fecal waste treatment facilities via an onsite bio-digester tank, fecal sludge treatment plant and its newer business urban SaaS (sewage treatment plant as a service), through which it provides sewage treatment facilities as a service to residences, commercial premises etc. “The idea is to treat sewage waste at the point of its generation” says Banka.
STORY SO FAR
Banka Bioloo started with railways as its largest client partners as the company was responsible for installing its mainstay bio-toilet and bio-digesters in trains. “Earlier railways were our largest mainstay client partner. Now as our product offerings have increased, revenue share from railways has reduced to 50-60%.” Client partners today include government bodies, public sector enterprises, co-operative housing societies, charities etc. While railways are the key partners for the bio-toilets, they became very popular during PM Modi’s Swachh Bharat Abhiyaan, but eventually the interest tapered a little, says Banka.
The bio-digester has been taken on a perpetual license from the Defence Research and Development Organisation (DRDO). Sanjay Banka says, that while more than 70 such licenses have been executed, only around five odd are actively utilizing the technology to deploy bio-digesters.
In 2018-19, the company launched the Fecal Sludge Treatment Plant. It treats sludge and septage evacuated from septic tanks and latrine pits. This has been designed in-house with low capital expenditure and operating expenditure requirements. Their Packaged Sewage Treatment Plant treats wastewater in residential and commercial complexes, malls etc.
In 2021, they entered into urban SaaS that provided domestic wastewater treatment facilities in large and mid-sized residential and commercial complexes, through state-of-the-art systems and technologies, including real-time monitoring. Banka says, their service manages to return 90% of the water to societies which can be used for flushing and gardening. The company has incorporated a wholly owned subsidiary called Varuna Megalitre primarily for urban SaaS.
“You could look at Banka Bio as providing a turnkey solution of sorts for proper sewage treatment and management”, says Banka
FINANCIALS
The company has increased its revenues from Rs. 70 lacs in 2012 to Rs. 55 crores in 2020, post which COVID caused their revenue to decline by a little. With Rs. 42 crores in revenue in FY23, the company is yet to recover to pre-COVID revenue. However, Banka is confident of a recovery, to the extent that the company is targeting a Rs. 100 crore revenue figure in the next 1-2 years.
This begets the question – how? Banka says the company has increased their solution portfolio. “We’ve developed expertise in O&M other than toilets and undertaken new works in railways that are even more specialised”. The “newer age” urban SaaS has increased to 50-60% of new client base. The company has managed bouncing back well from COVID. Where in FY21 the revenue dipped to Rs. 30 crore, in FY23, revenue stood at Rs. 42 crore. Though the EPS is yet to see a recovery as it dips from Rs. 2.87 to Rs. 2.34
Margins and Profits
Banka Bio enters into seven to 10 year contracts for provision of its facilities, during which investments, maintenance, returns and margins are recovered from the client partners. Banka says, the margins for all their offerings are more or less the same, with urban SaaS margins being a tad on the lower side. We failed to procure more on margins as Banka says the margins have neit
Being a technical service, Banka’s big cost is training and development. “We have team members deployed throughout the country for O&M of our sewage treatment facilities”, finding talent is our key challenge”, says Banka. The company has its own manufacturing and production unit and service team members in Telangana.
INVESTMENTS
The company has recently acquired a Chennai-based company focused on sewage and wastewater treatment in the hope to expand its product portfolio. “We’re investing in the company to expand capacity,” added Banka.
KEY SHAREHOLDERS
With investment from internationally renowned agency, WaterEquity, Banka Earth was founded in 2020 to further enhance the socio-economic objective that Banka presses on as primary objective.
An SDG6 advocate, Sanjay Banka truly believes in combining the ethos of social development with the profits from capitalistic enterprises.