Water administration firm VA Tech Wabag has raised Rs 120 crore from marquee buyers for “progress capital”, via a preferential difficulty of fairness shares at Rs 160 apiece.
The corporate has been ready to do that at a time when most infrastructure administration gamers are nonetheless struggling to get better from the coronavirus-induced lockdowns.
Of the sum raised, Rakesh Jhunjhunwala has invested Rs 80 crore, Basera House Finance has invested Rs 24 crore, and Jai Corp promoter Anand Jain, the stability Rs 16 crore.
That is practically 10 p.c of the corporate’s market capitalisation. Already, the corporate’s share value has gained 80 p.c in three weeks.
|In Rs Cr||FY19||FY20||FY21e|
|Supply: ICICI Securities|
VA Tech Wabag presents water administration options to municipalities and companies and operations and upkeep companies. The corporate offers options for water conservation, utilization optimisation as wells as these for recycling and reuse of sources.
As on March 2020, the corporate had an order ebook of Rs 5,947 crore, and broking agency ICICI Securities expects it to develop 6 p.c within the present monetary 12 months. Nevertheless, revenues and profitability are more likely to be decrease, year-on-year, in accordance with the brokerage.
The corporate will get a majority of its revenues from municipal companies. Industries and upkeep segments present the remaining.
It’s worthwhile to notice that in contrast to many different infrastructure administration corporations, VA Tech Wabag has a comparatively low degree of internet debt in relation to its internet price. As on March 2020, the corporate’s debt stood at Rs 482 crore, and it had money and money equivalents price Rs 320 crore. As compared, its internet price on the finish of the earlier monetary 12 months stood at Rs 1,174 crore
What’s the road considering?
Brokerage Phillip Capital says the corporate has a robust order ebook and expects execution to select up in FY21. It provides that “the present pandemic will solely speed up investments in sanitation and water remedy”, which is able to spur long-term demand.
ICICI Securites is a bit more circumspect. It says the present working capital stretch is impacting near-term money move and delay in collections may harm earnings.
With an FY20 EPS of Rs 19.three per share, as on August 26, the corporate trades at a trailing value to earnings ratio of 10.98 instances.
First Printed on Aug 26, 2020 07:16 pm