This worth chain may be broadly divided into three components: upstream, midstream, and downstream.
Upstream consists of water sourcing and infrastructure, equivalent to firms concerned in creating pipelines, pumps, and filtration techniques. Midstream covers the remedy of water, the place firms deal with purification and desalination applied sciences. The downstream section consists of water distribution, wastewater remedy, and recycling providers.
Governments worldwide are prioritizing water administration by way of tasks just like the Jal Jeevan Mission in India that goal to offer secure consuming water to all households. Moreover, insurance policies round industrial water recycling and decreasing water wastage have gained traction, providing progress alternatives for firms within the sector.
Let’s take a look at these segments intimately and perceive their progress prospects.
Shares concerned in water remedy and desalination
Water remedy and desalination are essential processes within the water system worth chain. Water remedy entails purifying water from pure sources or wastewater to make it secure for consuming, industrial use, or agricultural wants.
Listed here are the businesses concerned on this sector which might be taking some severe efforts.
#1 Welspun Enterprises Ltd
Welspun Enterprises is a key participant in infrastructure improvement, with a deal with the highway, water, and wastewater sectors.
The corporate has important investments in water infrastructure, together with large-scale tasks just like the water provide to 2,544 villages in Varanasi, Ayodhya, and Meerut, valued at ₹2,900 crore.
Welspun can also be main the event of a 418 MLD wastewater remedy facility in Dharavi and a 2,000 MLD water remedy plant in Bhandup, Mumbai, estimated at ₹4,120 crore.
The corporate’s order ebook consists of ₹9,630 crore in water-related tasks, with main tasks just like the tertiary handled water conveyance tunnel for BMC valued at ₹1,990 crore.
Welspun Enterprises’ strategic strategy to bidding for high-value tasks positions it as a number one participant in India’s water infrastructure.
Coming to its financials, the corporate has reported a 25% improve in consolidated earnings for first half of FY25, reflecting strong progress.
Trying ahead, the robust order ebook and deal with city infrastructure current important progress alternatives for Welspun within the coming years.
#2 VA Tech Wabag Ltd
VA Tech Wabag focuses on water remedy options, together with water and wastewater remedy crops, desalination, and wastewater recycling.
The corporate focuses on offering EPC providers for large-scale municipal and industrial water remedy tasks, with a powerful presence in India and worldwide markets, notably within the Center East, Africa, and Southeast Asia.
Lately, the corporate secured important orders, together with a serious sewage remedy mission in Chennai, which can improve its place within the home market.
VA Tech Wabag is presently specializing in rising its market share within the rising desalination sector, which is pushed by water shortage issues.
Coming to its financials, the corporate’s gross sales have grown at a CAGR of two.2% within the final 5 years pushed by a powerful order ebook. A low income progress is primarily as a consequence of sluggish order execution.
The corporate’s internet revenue has grown at a CAGR of 24.4%. Its profitability was barely affected by excessive commodity costs. Nonetheless, it bounced again robust within the monetary yr 2024 primarily as a consequence of its improved tempo of order execution.
Being a well-established participant within the water infra enterprise, the corporate has a aggressive edge over its friends. It has a diversified shopper base throughout municipalities and industrial companies throughout India and several other nations.
#3 EMS Ltd
EMS is a Delhi-based multi-disciplinary EPC firm specializing in offering turnkey providers for water and wastewater remedy, sewage administration, and water provide techniques.
The corporate’s water infrastructure division is devoted to delivering full options for water and wastewater remedy crops (WWTPs), together with sewage remedy, water remedy, and effluent remedy techniques for presidency and municipal our bodies.
EMS focuses on tasks funded by nationwide and worldwide businesses just like the World Financial institution and underneath schemes equivalent to Atal Mission for Rejuvenation and City Transformation (AMRUT) and the Nationwide Mission of Clear Ganga (NMCG).
Latest developments embody the acquisition of a 75% stake in Brijbihari Pulp and Paper, increasing its operational attain. EMS has additionally been increasing geographically, securing tasks in new areas equivalent to West Bengal, Jharkhand, and Karnataka, alongside its robust presence in Uttar Pradesh and Rajasthan.
The corporate tasks a income progress of 25%-30% for FY25, pushed by its increasing order ebook, which now stands at ₹1800 crore, with a bid pipeline of ₹4,000 crore.
Financially, EMS has reported regular progress, although money move from operations stays a problem. The corporate is well-positioned for progress within the water sector as urbanization and authorities initiatives drive demand for water and wastewater administration options.
#4 Ion Trade (India) Ltd.
Ion Trade (India) is a number one supplier of built-in water remedy options. The corporate provides a variety of providers, together with the development of water and wastewater remedy crops, and the availability of chemical substances, resins, and specialty options.
Notably, the corporate has been concerned in massive desalination tasks and wastewater remedy initiatives, with over 100,000 installations globally.
Ion Trade has additionally been increasing its world footprint, with important tasks in Sri Lanka and rising demand for desalination crops.
The corporate has just lately expanded its order ebook, reaching ₹3,400 crore in FY25 to this point, with a bid pipeline of ₹8,200 crore.
Ion Trade’s income and profitability have been robust, with a 20% YoY progress in H1 FY25. The corporate expects continued progress in its water infrastructure enterprise, particularly with elevated demand for seawater desalination and water remedy options.
#5 Triveni Engineering and Industries
Triveni Engineering is a diversified conglomerate concerned in sugar, ethanol, engineering, and water options. Based mostly in Uttar Pradesh, the corporate is amongst India’s largest sugar producers and a number one provider of ethanol.
Its water infrastructure division performs an important position, specializing in water and wastewater remedy by way of turnkey options. Triveni has efficiently executed over 100 tasks in each municipal and industrial segments, treating greater than 12,000 MLD of water.
In current developments, Triveni is increasing its water capabilities, with a ₹25 crore mission anticipated from Europe. The corporate can also be investing in different segments, equivalent to ethanol manufacturing and energy transmission.
Its engineering arm reported a sturdy 30%+ progress in Q2 FY25, and it secured a major order within the defence sector.
Triveni’s future progress prospects look strong, pushed by enlargement in sugar manufacturing capability, elevated ethanol output, and a deal with water infrastructure.
The corporate has already introduced investments of ₹18,000 crore to reinforce energy transmission and defence capabilities.
By way of financials, Triveni’s revenues for H1 FY25 have been ₹2,790 crore, marking a 7.1% improve, whereas its revenue earlier than tax stood at ₹120 crore.
Shares concerned in water remedy chemical substances
Water remedy chemical substances are substances used to deal with and purify water, eradicating impurities and guaranteeing secure water for consumption and industrial use.
These chemical substances embody coagulants, flocculants, disinfectants, pH adjusters, and scale inhibitors, amongst others.
Let’s check out the listed firms working on this section…
#1 Sicagen India
Sicagen India, established in 2004, operates in numerous sectors together with constructing supplies, energy and management techniques, industrial packaging, specialty chemical substances, and boat constructing.
It’s a key provider of high-end chemical substances for industrial water remedy, specializing in purposes that enhance manufacturing and course of effectivity.
Sicagen can also be a part of the $2 billion AM Worldwide group, with subsidiaries in cable manufacturing and precision engineering. Lately, the corporate proposed to amalgamate its wholly owned subsidiary, Danish Metal Cluster, to streamline operations.
Sicagen has a balanced geographical income break up, with exports contributing roughly 51% and the remaining from home gross sales.
With a powerful deal with worldwide markets and new improvements, Sicagen is about to profit from increasing water infrastructure tasks and industrial wants.
#2 Chembond Chemical compounds
Chembond Chemical compounds is a number one producer and provider of specialty chemical substances, providing merchandise throughout numerous industries equivalent to building, water remedy, biotech, and materials applied sciences.
The corporate focuses on metallic remedy, water remedy chemical substances, industrial enzymes, and high-performance coatings for structural safety.
Lately, the corporate has expanded its product vary, strengthening its place in water infrastructure and environmental sustainability. Chembond operates a number of manufacturing crops in India and has abroad subsidiaries in Malaysia and Thailand.
#3 Fineotex Chemical compounds
Fineotex Chemical compounds, established in 1979, focuses on manufacturing auxiliaries and specialty chemical substances for numerous industries equivalent to textiles, building, water remedy, and fertilizers.
Its water remedy division focuses on producing chemical substances for industrial water remedy, together with oil-based and water-based drilling fluid chemical substances.
Lately, the corporate made notable progress with its acquisition of Biotex Malaysia. Fineotex’s progress prospects are robust, with strategic investments in R&D and expansions in manufacturing capability, together with a brand new plant at Ambernath set to extend output within the coming yr.
For the second quarter of FY25, Fineotex reported a consolidated income of ₹150 crore, marking a 3% progress from the earlier quarter, with a PAT improve of 10% to ₹3.21 crore.
The corporate is well-positioned for future progress, pushed by each home and worldwide demand for its numerous product vary.
Shares concerned in water provide pipes & pumps
Water provide pipes and pumps are important parts within the distribution of water for residential, business, and industrial functions.
Pipes transport water from remedy crops to end-users, whereas pumps are used to maneuver water by way of pipelines, guaranteeing constant move and stress.
Listed here are the businesses concerned on this section…
#1 Welspun Corp
One other firm from the Welspun group, Welspun Corp is without doubt one of the largest producers of enormous diameter pipes globally, providing a various vary of merchandise, together with metal billets, TMT rebars, ductile iron (DI) pipes, stainless-steel pipes, and tubes.
In FY24, the corporate’s DI pipe gross sales quantity rose by practically 10x year-on-year to 135 KMT (kilo metric tonnes), reflecting the rising significance of water infrastructure in India.
The corporate additionally plans to arrange a 150 KMTPA (kilo metric tonnes every year) DI pipes manufacturing facility within the Center East with an funding of roughly ₹500 crore.
A significant improvement for the corporate has been the acquisition of Sintex-BAPL, which has allowed WCL to broaden into the plastic pipes section, including to its water options portfolio.
#2 Roto Pumps
Roto Pumps is a number one producer of progressive cavity pumps and different specialised pumps used throughout a variety of industries, together with wastewater, oil and gasoline, chemical substances, and meals and drinks.
The corporate just lately expanded its product line, beginning business manufacturing of submersible helical rotor pump units and photo voltaic pumping techniques by way of its subsidiary, Roto Vitality Techniques. These developments spotlight its deal with renewable vitality and water-related tasks.
Roto Pumps’ world presence spans over 55 nations, with enlargement into the Center East and North Africa (MENA) area, additional boosting its attain.
#3 Shakti Pumps
Shakti Pumps is a number one producer of pumps, motors, and controllers, providing superior options for a wide range of purposes, together with irrigation, horticulture, and home water provide.
The corporate has a powerful presence within the water infrastructure sector, notably within the photo voltaic pump market.
Shakti Pumps is a key participant within the PM KUSUM scheme, holding a major market share in home photo voltaic pumping options. Along with its conventional water pumping enterprise, Shakti Pumps has ventured into the electrical automobile (EV) section.
Shakti Pumps has secured important contracts in current months, together with a ₹290 crore deal from the Uganda authorities for solar-powered water pumping techniques. Shakti Pumps can also be enhancing its manufacturing capabilities, with a capability to supply over 5 million pumps yearly.
Financially, the corporate has proven spectacular progress, with Q2 FY25 income reaching ₹63.4 crore, a 315% improve YoY, and PAT of ₹10.14 crore, reflecting robust margins and future progress potential.
#4 Kirloskar Brothers
Kirloskar Brothers is a distinguished participant within the engineering and manufacturing sector, specializing in fluid administration techniques.
Its core enterprise consists of offering options for water provide, energy crops, irrigation, and different massive infrastructure tasks, together with pumps, valves, motors, and hydro generators.
Latest developments embody Kirloskar’s execution of main irrigation tasks throughout India and securing orders from high-profile tasks like AIIMS Jammu and Kanpur Metro.
The corporate additionally made substantial investments in its subsidiary, Kolhapur Metal, and is targeted on addressing offshore purposes with specialised merchandise for markets equivalent to Oman.
With robust progress prospects, Kirloskar Brothers is aiming for a double-digit income progress in FY25. The corporate can also be engaged on superior tasks, equivalent to growing pumps for nuclear energy crops and capitalizing on alternatives from the UK’s AMP8 program.
In Q2 FY25, the corporate reported a 13.4% YoY improve in consolidated revenues, reaching ₹1,040 crore, and a 90% progress in PAT.
#5 Hariom Pipe Industries (HPIL)
Hariom Pipe Industries, established in 2008, is a vertically built-in metal producer with a various portfolio of over 800 SKUs, together with merchandise like sponge iron, MS billets, HR strips, MS tubes and pipes, scaffolding, and galvanized pipes.
HPIL operates manufacturing items in Andhra Pradesh, Telangana, and Tamil Nadu, with a capability of 701,232 MTPA, producing a variety of metal merchandise.
In current developments, HPIL acquired M/s Extremely Pipes for ₹402 m, including MS tubes capability of 84,000 MTPA. The corporate additionally raised its approved share capital to ₹50 crore in September 2024 and plans to lift ₹700 crore by way of a professional institutional placement (QIP).
The corporate goals to achieve ₹2,500 crore in income by FY26, pushed by an anticipated improve in demand, particularly within the infrastructure sector.
#6 Tata Metaliks
Tata Metaliks, integrated in 1990 as a subsidiary of Tata Metal, is one in all India’s main producers of high-quality Pig Iron (PI) and Ductile Iron Pipes (DIP).
Lately, Tata Metaliks has been increasing its DIP capability, with a brand new plant underway in Kharagpur, geared toward rising its capability to 450,000 tonnes every year by FY 2024-25.
This enlargement will assist the corporate seize a bigger share of the rising demand for water infrastructure.
#7 WPIL
WPIL has established itself as a complete options supplier within the pumping techniques and water infrastructure sector, providing end-to-end providers from idea to commissioning.
The corporate’s water infrastructure portfolio is notable, encompassing main irrigation tasks such because the Kaleswaram scheme the place they’ve efficiently commissioned a number of 30MW metallic volute pump generators.
A big strategic improvement has been the divestment of their nuclear enterprise items in France and Switzerland to Newcleo for ₹620 crore, permitting them to focus on their core water and industrial pump operations.
The corporate’s progress trajectory is underpinned by a sturdy order ebook, with home tasks valued at ₹2,730 crore and worldwide orders price ₹530 crore unfold throughout strategic markets in Italy, South Africa, and Australia.
The corporate has been actively exploring enlargement alternatives in North America whereas strengthening its current world presence.
Coming to financials, its income reached ₹490 crore within the second quarter of FY25, accompanied by a formidable EBITDA margin of 21.3%, marking a considerable 54% year-on-year progress.
Shares concerned in water sewerage
Water sewerage refers back to the infrastructure and techniques used to gather, transport, deal with, and eliminate wastewater from properties, companies, and industries.
It consists of underground pipes, pumping stations, remedy crops, and disposal techniques that deal with each home sewage and stormwater.
In India, the water sewerage sector faces important challenges. Solely about 40% of city India has entry to a sewerage community, and even much less in rural areas. The federal government has launched a number of initiatives like AMRUT (Atal Mission for Rejuvenation and City Transformation) and the Nationwide River Conservation Plan to enhance this infrastructure.
The sector presents an enormous alternative, with estimates suggesting India wants investments of about ₹2.5 trillion to attain common sewerage protection in city areas by 2030.
Listed here are the businesses concerned on this house…
#1 NCC
NCC is a diversified building and infrastructure improvement firm that executes turnkey EPC contracts throughout numerous sectors together with buildings, roads, irrigation, and water tasks.
Within the water infrastructure section, they concentrate on setting up water provide tasks, remedy crops, distribution networks, underground drainage techniques, and carry irrigation schemes, with important involvement within the Jal Jeevan Mission tasks price ₹6,000 crore.
A notable current improvement is their entry into the Good Meters section, securing three tasks valued at ₹8,080 crore, with area trials already underway in Bihar and deliberate for Maharashtra.
The corporate’s progress trajectory appears promising with a considerable order ebook of ₹52,370 crore and a potential mission pipeline exceeding ₹2.1 trillion, spanning throughout a number of sectors and states.
The corporate has posted robust monetary efficiency in Q2 FY25, reporting consolidated income of ₹5,190 crore with an improved Ebitda margin of 9%.
#2 Om Infra
Om Infra is a diversified infrastructure firm primarily centered on hydro-mechanical tools, metal fabrication, and turnkey options, with extra pursuits in actual property and hospitality.
The corporate’s core power lies in its water infrastructure enterprise, the place it focuses on offering end-to-end options for hydropower and irrigation tasks.
The corporate has established itself as a major participant within the Jal Jeevan Mission, which contains about 50% of their present order ebook of ₹2,140 crore.
Latest developments embody strategic asset monetization efforts, with plans to generate ₹700 crore from non-core actual property belongings and anticipated arbitration awards of ₹640 crore from numerous tasks, together with the Bhilwara Jaipur Toll Highway mission.
The corporate has offered steering for annual income between ₹8,500 crore and ₹1,000 crore, with focused Ebitda margins of 10-12%.
#3 Felix Industries
Felix Industries focuses on complete water and environmental options, emphasizing recycling, reuse, and discount.
The corporate’s core focus is on water and wastewater administration, providing superior techniques equivalent to Zero Liquid Discharge, Reverse Osmosis, Nano-Filtration, and Effluent Recycling. It additionally gives water cycle administration providers.
Moreover, Felix Industries has a major presence in industrial piping, buying and selling thermoplastic pipes and equipment, and in e-waste recycling, dealing with the complete lifecycle from assortment to materials restoration.
The water infrastructure section stays central to Felix Industries’ operations, leveraging a portfolio of over 450 proprietary applied sciences for purposes throughout water infra.
#4 RPP Infra Initiatives
RPP Infra Initiatives has established itself as a complete infrastructure improvement enterprise since its inception in 1995, specializing in essential infrastructure segments together with highways, water administration techniques, and civil building.
The corporate’s strategic realignment in direction of water infrastructure has yielded important outcomes, with this section now contributing 76% of income, marking a considerable improve from 22% within the earlier fiscal yr.
In a notable strategic enlargement, the corporate has diversified its portfolio by securing a 20-hectare land parcel in Sri Lanka for a ten MW solar energy set up by way of its subsidiary, signalling its entry into the renewable vitality sector.
The corporate maintains a powerful market place with a considerable order ebook of ₹3,200 crore, strategically distributed throughout infrastructure (48.8%) and water administration (43.9%) sectors.
Shares concerned in hydro mechanical parts
Hydro-mechanical parts are essential in hydropower and irrigation techniques, guaranteeing environment friendly water administration and vitality technology. These parts embody gates, valves, hoists, and penstocks, which regulate water move, stress, and storage in dams, canals, and hydropower crops.
Listed here are the businesses working on this section…
#1 Jash Engineering
Jash Engineering focuses on manufacturing tools for water consumption techniques, wastewater administration, and different industrial purposes.
The corporate provides end-to-end options, together with design, casting, fabrication, meeting, and testing, making it a one-stop supplier for water infrastructure wants. Water management gates account for almost all of its income, adopted by screening tools and valves, reinforcing its management within the water administration sector.
Jash exports its merchandise to over 45 nations and is among the many prime 5 world gamers in water management gates.
A few of its current milestones embody buying an 80% stake in Waterfront Fluid Controls (UK), increasing its world attain. The corporate is investing ₹70-75 crore to reinforce capability, with a brand new plant in Chennai set to start operations quickly.
Moreover, it launched India’s first indigenously manufactured disc filter machine in collaboration with INVENT of Germany.
With a powerful order ebook, Jash Engineering is concentrating on ₹670 crore in income for FY25 and plans to double it by FY28.
In H1 FY25, its income grew 61% to ₹260 crore, with revenue after tax surging by 212%.
#2 Texmaco Infrastructure
Texmaco Infrastructure operates throughout a number of enterprise segments, together with energy technology, actual property improvement, and funding earnings.
The corporate owns a 3 MW Mini Hydel energy mission on the Neora River in West Bengal, contributing 19.8% to its income by producing 8.2 million items of electrical energy, showcasing its involvement in water infrastructure.
Nonetheless, a good portion of its earnings stems from rental properties in Gurugram and Delhi and dividends and curiosity from investments.
Trying ahead, the corporate goals to unlock worth by way of its actual property tasks and preserve secure returns from its energy technology and rental companies.
Shares Concerned in Extremely-Pure Water & Zero Liquid Discharge
The ultra-pure water and 0 liquid discharge trade in India focuses on superior water purification and wastewater remedy applied sciences to satisfy stringent industrial and environmental requirements.
UPW is essential for industries like semiconductors, prescription drugs, and energy technology, requiring practically contaminant-free water.
Listed here are some firms working on this sector…
#1 Thermax
Thermax gives options for vitality, atmosphere, and chemical sectors, providing merchandise like boilers, heaters, air air pollution management techniques, and water and wastewater remedy techniques.
Within the water infrastructure area, Thermax is a frontrunner with superior water and wastewater remedy applied sciences, together with ultrafiltration techniques, zero liquid discharge options, and ion alternate resins.
Its new water remedy plant in Pune, commissioned in 2024, underscores its dedication to this essential sector. Thermax is well-positioned for progress, pushed by demand for inexperienced options and industrial merchandise.
For H1 FY25, the corporate reported income progress of 24% year-on-year, supported by strong orders and enlargement in key segments.
#2 Praj Industries
Praj Industries operates within the water infrastructure house by way of its engineering enterprise section, notably specializing in wastewater remedy techniques.
The water infrastructure division is a part of its broader engineering enterprise, which accounted for 18% of the corporate’s FY24 income.
Praj HiPurity Techniques, a subsidiary, additionally helps water-related tasks, particularly in industries like biopharma, sterile formulations, and private care, providing high-purity water techniques and modular course of options.
With rising world and home emphasis on sustainable industrial practices and stricter environmental laws, Praj’s water infrastructure enterprise is poised for progress.
#3 Taylormade Renewables
Taylormade Renewables focuses on renewable vitality and sustainable water remedy options. The corporate manufactures photo voltaic parabolic concentrating techniques and parts for steam technology, heating, and photo voltaic thermal purposes, together with air con, house heating, and waste evaporation.
It additionally provides biomass cook dinner stoves, photo voltaic dryers, PV cells, and patented water remedy applied sciences like TRL RAIN and TRL Zeo-Membrane, which handle essential industrial effluent and wastewater challenges with chemical-free, energy-efficient techniques geared toward attaining Zero Liquid Discharge (ZLD).
A notable mission of the corporate which is underway is a ₹230 crore water infrastructure improvement in Andhra Pradesh, together with water pipelines, a 24 MLD sewage remedy plant, and supply building.
With rising demand for ZLD applied sciences and renewable vitality, Taylormade is well-positioned for progress, supported by its patented applied sciences and increasing Construct, Personal, Function mannequin.
In conclusion
Water has emerged as one of the vital essential infrastructure sectors, with the complete worth chain taking part in an important position in addressing world water safety challenges.
In India, the sector is witnessing unprecedented progress pushed by authorities initiatives like Jal Jeevan Mission, AMRUT, and the Nationwide Mission of Clear Ganga, that are creating substantial market alternatives in water infrastructure improvement.
The monetary panorama on this sector is especially promising, with firms reporting strong order books and wholesome mission margins starting from 12-25%.
The inventory market has acknowledged this potential, reflecting robust investor confidence in water infrastructure shares.
As water shortage continues to be a urgent world challenge and environmental laws turn into stricter, firms working throughout the water system worth chain are well-positioned for sustained progress.
This makes the sector a gorgeous proposition for long-term buyers.
Nonetheless, earlier than making any judgments, buyers ought to contemplate the basics of those firms, their capacity to execute tasks, and company governance practices.
Glad Investing!
Disclaimer: This text is for data functions solely. It’s not a inventory advice and shouldn’t be handled as such.
This text is syndicated from Equitymaster.com
