Today, we recommend two stocks, both from the water supply management sector, recommended by the Trade Brains Portal, to buy for an upside potential of more than 21%. The water supply management is crucial for India due to its large population, dependence on agriculture, and increasing water scarcity. We also analyzed the market’s performance on Wednesday to understand what may lie ahead for the stock indices in the coming days.
1. Va Tech Wabag Ltd
- Current price: ₹ 1,588
- Target price: ₹ 1,920
- Upside: 21%
- Time frame: 12 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
The third-largest water technology company in the world, VA Tech Wabag Ltd., was established in 1924 and provides environmentally friendly solutions to the industrial and municipal sectors. With the assistance of over 1,600 water specialists, it provides services to almost 96 million people across more than 25 nations. With the aid of research and development facilities in Europe and India, WABAG has constructed more than 1,500 water and wastewater treatment facilities over the past 30 years and holds more than 125 patents.
The company’s FY25 sales were Rs 3,294 crore, a 15% increase from the previous year, while its EBITDA was Rs 430.2 crore. EBITDA grew at a 20% CAGR from FY22 to FY25. Profit after taxes grew by 20% annually and at a CAGR of 31% between FY22 and FY25. At Rs 705.6 crore, the company’s net cash has been positive for the past five years. Of the company’s geographical distribution, 38% originates from outside India, while 62% is in the country. The company also had an order inflow of about Rs 6,000 crore and continued to be a preferred bidder in the Hybrid-Annuity Model (HAM), which is worth Rs 3,000 crore.
Among the contracts and orders the company recently signed was a non-binding term sheet for a municipal platform to focus on the development of capital projects for the municipal sector with an equity investment commitment of $100 million in capital projects over a three to five-year period. The company received an O&M order for an Industrial TTRO Plant from IOCL, valued at about Rs 360 crore, and a Zero Liquid Discharge (ZLD) DBO deal from GAIL. Obtained a $371 million major consortium order from Al Haer Environmental Services Company for the EPC of a 200 MLD Independent Sewage Treatment Plant (ISTP).
Additionally, the company was awarded a $14 million order by BAPCO Refining B.S.C. (BAPCO) to operate (O&M) the Industrial Wastewater Treatment Plant (IWTP) in the Kingdom of Bahrain for seven years. The IWTP handles 4,400 US gallons per minute (USGPM) of wastewater. WABAG was also awarded a Rs 145 crore order by Chennai Petroleum Corporation Limited to design, engineer, supply, fabricate, install, and commission desalination water pipes connecting the CPCL Manali Refinery and the CPCL Desalination complex at Kattupalli.
Risk Factor
VA Tech Wabag is susceptible to currency fluctuations due to its 38% revenue exposure to overseas markets. Additionally, 69% of its operations are dependent on government orders, which puts it at risk for delays, sluggish execution, and working capital hardship. Project demand and financial performance are also under danger from geopolitical unrest, global economic slowdowns, and regulatory changes in areas like Russia, the Middle East, and Europe.
2. Enviro Infra Engineers Ltd
- Current price: ₹ 278
- Target price: ₹ 335
- Upside: 21%
- Time frame: 12 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Since its incorporation in 2009, the company has worked on industrial water reuse projects, drinking water treatment plants (WTPs), sewage treatment plants (STPs), common effluent treatment plants (CETPs), urban and rural drinking water distribution networks for various government agencies, and wastewater management projects. It is also a project developer (HAM mode) and an EPC works contractor. The company is present in eleven states and has completed fifty-two projects so far.
The company reported strong operational revenue growth in FY25, reaching Rs 1,066 crore, a 46% increase over FY24. PAT increased by 66% to Rs 177.15 crore. The company has delivered a strong quarter with a 30% increase in PAT and a 31% YoY sales gain in Q4 FY25. With an anticipated yearly growth rate of 35% to 40%, the company hopes to continue on its current trajectory of expansion while preserving strong EBITDA margins between 22% and 24%.
The company has a robust order book of Rs 1,185.5 crore, an O&M portfolio of Rs 806.6 crore, and bids of Rs 5,000 crore in the works. Over Rs 200 crore worth of new EPC and O&M projects were secured by the company. The Maharashtra Industrial Development Corporation (MIDC) awarded the company a renowned project in recent months that is worth Rs 400 crore and aims to control pollution in the Panchganga River. The company’s acquisition of two major solar power facilities in Odisha and Maharashtra, with 69 MW (AC) capacity, is a major step towards its goals for renewable energy.
Looking forward, the company aims to expand the scope of its projects from 20 to 50 MLD for common effluent treatment facilities and from 50 to 200 MLD for sewage treatment plants. In addition to extending their water infrastructure nationwide through reuse, ultrafiltration, RO, and ZLD facilities, they are also looking for potential in solar assets and EPC projects.
Risk Factor
Revenue and profitability are solely dependent on winning contracts. Additionally, because of the fierce rivalry in this market, companies must bid aggressively to secure contracts, which limits their operating margin to a reasonable level. Additionally, because of the seasonality of the water EPC sector, more than 70% of the work is completed in the six dry months of the year because of the impact of the monsoon from May to October, and maintaining a profit margin through operational efficiency becomes crucial.
Market Recap July 23rd, 2025
The Nifty 50 opened on a higher note at the start of the day, opening at 25,139.35, a growth of 78.45 points from the closing price of 25,060.90 of the previous day. The index gained 159.00 points, or 0.63%, on Wednesday, with a day-high of 25,233.50 in the morning and closing at 25,219.90. The RSI was at 52.29, far below the overbought zone of 70. It closed above all the 20/50/100/200-day EMAs on the daily chart. Sensex concluded the day at 82,726.64, up 539.83 points, or 0.66%, with an RSI of 52.46.
Many major indices were in green on Wednesday. The Nifty Services Sector Index gained 288.05 points, or 0.87%, to close at 33,481.55. The top gainers of this index were Max Healthcare Ltd., LTIMindtree, Shriram Finance, and Bharti Airtel, which jumped up to 3.00%. Additionally, the Nifty Financial Services Index, which closed at 27,215.85, up 225.40 points, or 0.84%, was among the top gainers.
The index was boosted by stocks such as ICICI Bank Ltd., which surged 2.78%; HDFC Bank Ltd., which grew 2.23%; and ICICI Lombard General Insurance, which jumped 2.01% on Wednesday. The Nifty Auto Index, which closed at 24,079.40, up 203.55 points, or 0.85%, was also among the top gainers. The index was increased by stocks such as Tata Motors, Samvardhana Motherson International, and Bharat Forge, which grew by more than 1.60%.
The Nifty Realty Index, however, fell −25.85 points, or -2.60%, and closed at 970.20. The index declined as a result of heavyweights such as Lodha Developers Ltd., Brigade Enterprises, Oberoi Realty, and Prestige Estates Projects Ltd. tumbling more than 2.2%. Another significant loser was the Nifty Media Index, which closed at 1,717.30, down -16.30 points, or -0.9%.
Asian markets also showed a bullish trend on Wednesday, after U.S. President Donald Trump declared a “massive Deal” with Japan, which included a 15% tariff on Japanese exports to the U.S. Hong Kong’s Hang Seng grew 408.04 points, or 1.60%, to 25,538.07. The Kospi in South Korea closed at 3,183.77, up by 0.43% or 13.83 points. Japan’s Nikkei 225 jumped by 1,396.40 points, or 3.39%, settling at 41,171.32. Whereas Shanghai’s Composite Index stayed flat, closing the day marginally higher at 3,582.30, up 0.44 points, or 0.01%. At 5:00 p.m., Dow Jones Futures were up 215.40 points, or 0.48%, on the US stock exchange at 44,715.85.
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