Water Management stock engaged in the business of water treatment, by providing end-to-end solutions like design, supply, installation, construction, and operational Management jumped 5 percent in the day’s trade upon receiving a repeat work order worth Rs. 415 Crores from Chennai Metropolitan Water Supply and Sewage Board.
Price Action
With a market capitalization of Rs. 8,058 Crores, the shares of Va Tech Wabag Limited were trading at Rs. 1,295.65 per equity share, up 3 percent from its previous day’s close price of Rs. 1,259.75.
What Happened
Va Tech Wabag Limited has secured a repeat order from the Chennai Metropolitan Water Supply and Sewage Board for the Operation & Maintenance of 110 MLD SWRO Desalination Plant at Nemmeli in Chennai for 7 years for a consideration of Rs. 415 Crores.
The Nemmeli Desalination Plant is equipped with the most advanced Sea Water Reverse Osmosis (SWRO) technology ensuring the production of high-quality desalinated water for domestic consumption, coupled with a process that optimizes power consumption. The water produced from this Plant is being supplied to South Chennai, benefitting millions of residents.
Va Tech Wabag’s initial Operation & Maintenance contract was completed in 2021, after which the contract was extended by the customer and Wabag continued to Operate & Maintain the Plant. CMWSSB floated a public tender for the Operation & Maintenance of the Plant, and Wabag secured this repeat order for Operating & Maintaining the Plant for another seven years.
Management Message
Commenting on this order, Mr. Shailesh Kumar, CEO, of India Cluster said, “We are extremely proud to secure this repeat order for the Operation & Maintenance of the 110 MLD Nemmeli Desalination Plant. In line with our Growth Strategy, this new order further strengthens our O&M order book, providing annuity income, improving cash flows, and revenue predictability.
This award underscores the continued trust and confidence our client CMWSSB has in our expertise and consistent performance, for which we are extremely thankful. We look forward to continuing our partnership and ensuring the plant operates at peak efficiency, serving the community by providing a safe and reliable water supply.”
About the Company
Va Tech Wabag Limited is engaged in the business of water treatment, by providing end-to-end solutions like design, supply, installation, construction, and operational management of drinking water, wastewater management, desalination, and many more. It has a robust order book of Rs. 107 Billion or Rs. 10,700 Crores
It has a strong clientele base with well-known players like Pepsico, Reliance Industries, NMDC, Indian Oil, ONGC, Delhi Jal Board, CIDCO, Bangalore Water Supply and Sewage Board, and many others.
Financials and Ratios
Its Revenue from operations grew by 13.33 percent from Rs. 553 Crores in Q1FY24 to Rs. 626 Crores in Q1FY25, accompanied by profits of Rs. 50 Crores to Rs. 55 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 13.8 percent, and a return on capital employed (ROCE) of 19.8 percent. It has reported a debt-to-equity ratio of 0.16.
Written by: Bharath K.S
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