Rekha Jhunjhunwala’s Investment in VA Tech Wabag: A Remarkable Surge
Rekha Jhunjhunwala, a seasoned investor, has positioned herself in the water treatment industry through her significant investment in VA Tech Wabag. Recently, the company’s stock has gained attention for its impressive performance, reflecting a robust recovery and growth potential in its share value. VA Tech Wabag has witnessed its stock price soar to a record high, marking a remarkable turnaround story in just a short period.
Recent Stock Performance
As of the latest trading session, VA Tech Wabag’s shares closed at Rs 1402.55, an increase of 2.12% on the Bombay Stock Exchange (BSE). Throughout the day, the stock peaked at Rs 1444.00, setting a new one-year high by jumping 5.14% intraday. This is a stark contrast to the company’s one-year low of Rs 436.35 recorded on October 12, 2023. In less than a year, the stock has surged approximately 231%, highlighting investor confidence and market optimism surrounding the company’s future.
Rekha Jhunjhunwala’s Holdings
According to the shareholding pattern for the June quarter, Rekha Jhunjhunwala holds 50 lakh shares, translating to an 8% stake in VA Tech Wabag. Her involvement in the company adds a layer of credibility, enticing other investors to take note of the firm’s remarkable growth trajectory.
Brokerage Recommendations and Price Targets
Brokerages are increasingly optimistic about VA Tech Wabag’s prospects. Notably, ICICI Securities has endorsed the stock with a ‘buy’ rating, subsequently raising its target price from Rs 1,445 to Rs 1,541. Similarly, Axis Securities has begun coverage with a ‘buy’ recommendation and set an even higher target of Rs 1,700, reflecting strong belief in the company’s capabilities to harness growth in the water treatment sector.
Reasons Behind the Bullish Outlook
Brokerages attribute their positive outlook to several key factors:
- The company has significantly improved its balance sheet over the past two years and enhanced its profit margins.
- Recently, VA Tech Wabag secured a substantial Rs 2,700 crore order for a new plant in the Middle East, which equals its projected revenue for FY 2024.
- With a current order book totaling Rs 7,900 crore, the company’s book-to-bill ratio has exceeded three, indicating a robust demand for its projects.
- VA Tech Wabag is well-positioned to bid for a desalination plant project in Egypt, with a daily capacity of 100 million liters, a promising opportunity within a flourishing market.
Industry Trends and Future Prospects
Axis Securities emphasizes the favorable landscape for VA Tech Wabag due to increasing prospects within the water treatment industry. The firm’s improving profitability and expansive order backlog position it well for long-term growth. Currently, the stock trades at 18 times its estimated earnings per share (EPS) for FY26, but with Axis valuing it at 23x FY26E EPS, the potential for price appreciation remains substantial.
Conclusion
As VA Tech Wabag continues to achieve significant milestones and brokerages shower praise on its performance, investors are keenly watching how the stock evolves. Rekha Jhunjhunwala’s strategic stake in the company reinforces confidence among market participants. With a solid order book and favorable industry dynamics, VA Tech Wabag could be on the verge of an exciting growth phase.
