Shares of this smallcap company jumped 4 percent in Friday’s trading session after receiving an order of Rs. 4,123.88 crores from the Government of Maharashtra. The shares have delivered a multibagger return of 162 percent to its shareholders in one year.
With a market capitalization of Rs. 4,522 crores, the shares of Welspun Enterprises Ltd started Friday’s trading session on a higher note at Rs. 342.10 compared to its previous close of 314.70. During the trading session, the shares hit a high of Rs. 343, gaining around 4 percent and are currently trading at Rs. 326 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced that it had received a significant contract to design, build and operate a 2,000 MLD (million litres per day) Water Treatment Plant (WTP) at Bhandup Complex in Mumbai, from the Brihanmumbai Municipal Corporaton (BMC).
The contract, valued at Rs. 4,123.88 Crores, encompasses the design, construction, operations and maintenance of the plant. The value includes an Operations and Maintenance (O&M) component of Rs. 1,880.44 crores. The design‐build project is slated to be completed within a timeframe of 48 months and is to be comprehensively operated and maintained for a period of 15 years thereafter.
Furthermore, the company mentioned that the proposed water treatment plant, is one of the largest in the world in terms of capacity, is located at BMC’s Bhandup Complex, which currently supplies drinking water to Mumbai City through existing Water Treatment Plants.
To accomplish this project, the company has partnered with Veolia, one of the world’s largest technology companies specializing in the water sector, as its Technology provider and will aim to leverage advanced treatment processes and technologies, in line with its commitment to maximizing resource utilization and developing sustainable infrastructure solutions.
Looking at the company’s financial statements, the revenue increased by 9 percent from Rs. 646 crores during the September quarter to Rs. 707 crores in the December quarter. In addition, the net profits zoomed by 16 percent from Rs. 69 crores to Rs. 80 crores during the same period.
As of December 31, 2023, Welspun Enterprises has an order book of Rs. 8,500 crores. With the addition of the above-mentioned order, the outstanding order book of the company would be around Rs. 12,650 crores, of which Rs. 9,750 crores is from the water sector and the balance Rs. 2,900 crores is from the road sector. This order book consists of Rs. 3,677 crore of O&M & Asset replacement.
Moreover, the company is currently executing some projects including the Rural Water Supply Project under the Government of India Jeevan Mission in Uttar Pradesh covering around 2,500 villages and the 418 MLD Waste Water Treatment Facility (WwTF) project at Dharavi, Mumbai.
In August 2023, WEL acquired Michigan Engineers Pvt. Ltd. (now renamed Welspun Michigan Engineers Limited) to expand in the urban water infrastructure and tunnelling solutions segment.
Headquartered in Mumbai, Welspun Enterprises was incorporated in 1994. The company specializes in the development and operation of roads and highways, water and wastewater projects under various Public-Private Partnership (PPP) models in both rural and urban areas of the country.
Written By Vaibhav Patil
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