Shares of this small-cap infra stock jumped around 3 percent in Thursday’s trading session after the company emerged as the lowest (L1) bidder for the development of a water treatment plant. Year-to-date, the company’s stock has gained nearly 15 percent for its stakeholders. 

With a market capitalization of Rs 5,123.39 crores, the stocks of Welspun Enterprises Limited started their trading session on Thursday at Rs 378.05 and currently trade at Rs 370.15, gaining approximately 3 percent compared to the previous closing levels of Rs 361.85 apiece. 

Such bullish stock price behavior was witnessed after the company, through a regulatory filing with the Bombay Stock Exchange (BSE), intimated about the company emerging as the lowest (L1) bidder for the development of a water treatment plant. 

The company received an order from the “Brihanmumbai Municipal Corporation”, a client of the company, for the development of a new Water Treatment Plant at Bhandup Complex, Mumbai, with a capacity of 2,000 Megaliters Per Day (MLD). The order includes civil, mechanical, electrical, and instrumentation work. 

The total contract value is Rs 4,128 crores, excluding GST, consisting of the design value of Rs 2,248 crores and the O&M value of Rs 1,880 crores. The Project is decided to be designed and constructed within 48 months and comprehensively operated and maintained for 15 years thereafter. 

During the recent financial quarters, the company has reported positive movements as far as the operating revenues and net profits are concerned. The former took a shift from Rs 645 crores during Q2FY24 to Rs 706 crores during Q3FY24, and the latter, keeping the timeframe the same, rose from Rs 69 crores to Rs 80 crores. 

As a result of the above, the company reported decent return ratios during FY22-23 with the return on equity (RoE) reported at 30.67 percent and the return on capital employed (RoCE) reported at 12.32 percent. 

As per the recent presentations, the company reported an unexecuted order book of Rs 1,710 crores, with Tunneling contributing to 60 percent of the same, and the remaining 40 percent from rehab, bridge, pumping stations, and marine projects.

Welspun Enterprises Limited is a company based in India that is engaged in the infrastructure business. The company develops and operates various public-private partnership (PPP) projects in various sectors, such as water supply, roads, and urban infrastructure. 

Written by Amit Madnani 


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