VA Tech Wabag rallies in opening trade as Russian Projects resumes

VA Tech Wabag rallies in opening trade as Russian Projects resumes 

Wabag climbs 4% as it touches Rs 238.7 on the bourses on July 4.

VA Tech Wabag is a pure-play water technology Indian company with having global presence. The company on Friday, July 1 announced in a press release that its project in Russia has resumed which was suspended in April 2022 on account of ongoing Geopolitical uncertainty in the region. It informed that it has resumed the work with full resources to meet the project timelines. 

The company had secured an Engineering and Procurement (EP) order from Amur Gas Chemical Complex LLC (AGCC) in Russia in August 2021, worth USD 165 million(Rs 1300 crore). The project had been progressing well and based on the progress achieved, the Company has invoiced and collected USD 21.61 million. 

AGCC is a joint venture of SIBUR Holding Russia and China Petroleum & Chemical Corporation (Sinopec), China. AGCC is set to become one of the world's largest basic polymer production facilities. Wabag was roped in as a technology and system integrator for the Integrated Treatment Facilities (Waste Water Treatment unit). 

With the turn of geo-political events, the project was put on hold in April 2022, as a result, the shares of VA Tech Wabag were constantly under selling pressure. On June 17, the stock hit its 52-week low at Rs 220 per share. At lower level, the stock has corrected 30% YTD. 

Notwithstanding, the company has a strong order pipeline of Rs 10107 crore which is 3.4x of FY22 revenue. Apart from having a robust order book, the company is focussing on improving its bottomline more than the topline. The Russian project is in line with the renewed focus of the company on EP Projects avoiding the construction component which will leverage the key strengths of Wabag i.e design, engineering, and process optimisation. Wabag is currently focussing on its international projects which are multilaterally funded. 

At 11.25 am, the shares of VA Tech Wabag were quoting at Rs 235.95 up 2.68% or Rs 6.15 per share.