Rakesh JhuJhunwala News : The shares of Rakesh Jhunjhunwala’s 8.04 percent stake company Va Tech Wabag may jump by more than 50 percent. Brokerage and research firm Nomura has said that the share price of water treatment company Va Tech Wabag may see a sharp increase, hence it has retained its BUY rating. The company is headquartered in Chennai and is a multinational water treatment company. This company is one of the major water treatment companies in the whole world and its focus is on emerging economy market like India. According to the shareholding pattern on BSE, veteran investor Rakesh Jhunjhunwala holds 8.04 percent stake in this company. At the end of the June quarter, he had 50 lakh shares of this company.
Nomura said, the company will earn huge
The company has retained the ‘Buy’ rating of this stock. Nomura has said that the target price of this share of Va Tech Wabag can be kept at Rs 546. This stock is showing a jump of more than 50 percent. The brokerage firm says that the company seems to have a very strong order potential. Its focus on industrial orders can boost its EBIDTA margin significantly. However, the prospect of a slowdown in the government’s capital expenditure for water poses a major risk to the company. Also, due to the sharp rising prices of the commodity, its revenue can also be affected.
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The company got strength from the flagship schemes of the government
Nomura’s result note on Va Tech Wabag states that the company’s results for the first quarter of the current financial year are more or less as expected. According to the company’s management, had the impact of COVID-19 not been there, there could have been an increase of 10 to 15 percent in revenue and 150 basis points in EBIDTA margin. After all, what is the reason behind Nomura’s estimate of a 50 per cent jump in the company’s share prices? According to the company’s management, it has a lot of opportunities to participate in the flagship schemes of the government related to water purification. The government has started projects like Jal Jeevan, Amrit and Namami Gange. The company will have a lot of work in this. Apart from this, big projects like Chennai desalination to clean brackish water will also be in its pipeline. Its high-margin industrial segment has also revived due to good prospects in the oil and gas sector.
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