Rekha Jhunjhunwala's investment in this stock doubles in less than 9 months

Shares of VA Tech Wabag hit a 23-month high of Rs 317 after it jumped 3 per cent on the BSE in intra-day trade on Wednesday, having gained 13 per cent in the past four days, after it reported a strong set of numbers for quarter ended March 2021 (Q4FY21). The stock of the sewage and water treatment solutions provider was trading at its highest level since July 2019.

Ace investor Rakesh Jhunjhunwala’s wife Rekha Jhunjhunwala held 5 million shares, or 8.04 per cent stake, in VA Tech Wabag as on March 31, 2021, the shareholding pattern data show.

Her investment in the company has nearly doubled -- up 98 per cent -- in less than nine months after she subscribed the shares of VA Tech Wabag via preferential issue. On September 29, VA Tech Wabag, the Indian multinational player in the water treatment industry, had allotted 7.5 million equity shares to investors including Rekha Rakesh Jhunjhunwala at price of Rs 160 per share by way of preferential issue.

For January-March quarter (Q4FY21), VA Tech Wabag reported a 52.9 per cent year on year (YoY) jump in its consolidated net profit at Rs 46.6 crore on the back of healthy operational income. Revenue from operations grew 27.3 per cent YoY at Rs 999 crore. EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin, excluding divestment gain, improved 50 basis points (bps) at 7.6 per cent from 7.1 per cent in the year-ago quarter.

The company, for second consecutive year, generated positive operational cash flow at Rs 135 crore on consolidated and Rs 105 crore on standalone basis. The company said it has order book of over Rs 9,500 crore including Framework contracts with an over 3x revenue visibility.

According to analysts, improvement seen in revenue generation and debt level are expected to continue as execution is picking up with major projects have reached revenue generation stage. With Order book of more than 3 times of annual revenue, the company has the leverage to be more choosy in selecting orders. Increased government focus and higher budgetary spends on water related projects like Jal Jeevan Mission, Namami Gange etc will help in boosting the order intake going forward, they say.

At 11:25 am, the stock of VA Tech Wabag was up 1 per cent at Rs 311 on the BSE, as compared to a 0.21 per cent rise in the S&P BSE Sensex. A combined around 1.05 million shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.

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