VA Tech Wabag, a leading player in the water technology sector, has secured a significant repeat order worth approximately ₹415 crore from the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB). This contract pertains to the operation and maintenance (O&M) of the 110 million liters per day (MLD) seawater reverse osmosis (SWRO) desalination plant located in Nemmeli, Chennai, for a duration of seven years.
Project Background and Significance
The Nemmeli Desalination Plant, inaugurated in 2013, holds the distinction of being India’s first municipal desalination facility constructed on a Design, Build, Operate (DBO) basis for potable water purposes. VA Tech Wabag’s initial O&M contract concluded in 2021, after which the company continued its services through an extension granted by CMWSSB. Following a public tender process, Wabag has now secured this repeat order, reaffirming its expertise and reliability in managing large-scale desalination projects.
Strategic Importance of the Order
This contract underscores VA Tech Wabag’s robust position in the water treatment industry and its enduring relationship with CMWSSB. The Nemmeli plant plays a crucial role in augmenting Chennai’s water supply, addressing the city’s perennial water scarcity issues. By ensuring the plant’s efficient operation over the next seven years, Wabag will contribute significantly to providing a sustainable and reliable source of drinking water to Chennai’s residents.
Financial Performance and Market Position
VA Tech Wabag has demonstrated a strong financial trajectory, with its shares delivering multibagger returns of approximately 166.4% in 2024. The company has secured orders totaling around ₹4,000 crore over the past three months, reflecting its growing prominence in both domestic and international markets.
In Q2 FY25, Wabag reported a consolidated revenue from operations of ₹700.3 crore, marking a year-on-year increase of nearly 5.3% from ₹665 crore in Q2 FY24. Net profit for the same period rose by 17% YoY, from ₹60.2 crore to ₹70.6 crore, driven by effective debt management and improved operating margins.
Implications for the Water Treatment Industry
The successful acquisition of this contract highlights the increasing demand for advanced water treatment solutions in urban centers facing water scarcity. VA Tech Wabag’s expertise in desalination and wastewater treatment positions it favorably to capitalize on emerging opportunities in this sector. The company’s focus on sustainable and energy-efficient technologies aligns with global trends emphasizing environmental conservation and resource management.
Conclusion
VA Tech Wabag’s recent order from CMWSSB not only reinforces its leadership in the water technology domain but also underscores its commitment to addressing critical water challenges in urban India. As the company continues to expand its portfolio of projects, it stands poised to play a pivotal role in shaping the future of water management solutions, both domestically and internationally.
