Shares of VA Tech Wabag, a key stock in Rekha Jhunjhunwala’s portfolio, jumped over 7 percent on Wednesday, January 29, following the announcement of a significant operations and maintenance (O&M) contract worth ₹121 crore.
The company secured a seven-year contract to operate a wastewater treatment plant in Bahrain, strengthening its foothold in the Middle East. The order, awarded by BAPCO Refining, builds on VA Tech Wabag’s existing presence in the country, where it has been managing a sewage treatment plant since November 2018.
Rekha Jhunjhunwala, the wife of the late investor Rakesh Jhunjhunwala, held 50 lakh shares in VA Tech Wabag, representing an 8.04 percent stake as of the December 2024 quarter.
Strengthening Middle East Presence
VA Tech Wabag stated that the new contract further solidifies its position in the Middle East and bolsters its leadership in the O&M segment. The Industrial Wastewater Treatment Plant (IWTP) at BAPCO’s refinery is equipped with cutting-edge Membrane Bioreactor (MBR) technology, ensuring high-efficiency wastewater treatment while adhering to stringent environmental and industrial standards. The facility is capable of processing 4,400 US gallons per minute (USGPM) of industrial wastewater, underscoring the company’s expertise in handling large-scale projects.
The company already operates the 40 MLD Madinat Salman Sewage Treatment Plant in Bahrain, an engagement that has been in place since November 2018.
“This contract reflects our technological expertise and our ability to deliver world-class water solutions, particularly within the oil and gas sector. We appreciate BAPCO’s trust and confidence in our capabilities,” said Srinivasan K, General Manager of WABAG’s Middle East Regional Headquarters.
Stock Price Movement
Following the announcement, VA Tech Wabag’s stock surged as much as 7 percent to ₹1,298.45 during intra-day trading. Despite the rally, the stock remains 33 percent below its all-time high of ₹1,943.95, recorded in December 2024. However, it has shown remarkable resilience, doubling from its 52-week low of ₹647.60, registered in January 2024.
Over the past year, VA Tech Wabag has delivered an 88 percent return. However, it has faced some recent headwinds, declining 21.5 percent in January after an 8.5 percent drop in December 2024.
Recent Order Wins
Apart from the Bahrain contract, VA Tech Wabag has secured multiple significant orders in recent months:
Chennai Petroleum Corporation Ltd (CPCL) Order: Earlier in January, the company won a ₹145 crore order from CPCL for the design, engineering, supply, fabrication, installation, and commissioning of desalination water pipelines connecting the CPCL Manali Refinery and the CPCL desalination plant at Kattupalli. The project is expected to be completed within 12 months.
Lusaka Water Supply Project in Zambia: In December 2024, VA Tech Wabag announced a €78 million (approximately ₹700 crore) order from Lusaka Water Supply and Sanitation Company in Zambia. This contract marks a significant expansion in its international business portfolio.