 "VA Tech Wabag tanks 19% as Saudi Water Authority cancels Rs 2,700 cr order")
Shares of VA Tech Wabag (Wabag) tanked 19 per cent to Rs 1,522.30 on the BSE in Wednesday’s intra-day trade after the company said the Kingdom of Saudi Arabia's Saudi Water Authority cancelled an order worth Rs 2,700 crore for a 300 MLD Mega Sea Water Desalination Plant.
In an exchange filing, Wabag said the Customer has notified all tender participants on December 16, 2024, that the said tender stands cancelled pursuant to their internal administrative procedures.
Wabag had received a 300 MLD Mega Sea Water Desalination plant order in Kingdom of Saudi Arabia on September 6, 2024. The company said it is in touch with the customer to understand and comprehend the reasons for such a cancellation in detail.
This was a major order win for Wabag. Post cancellation of this order, Wabag's order book would now stand at Rs 10,450 crore. Which means the order book to sales ratio still stands well over 3 times, providing revenue visibility for the medium term, ICICI Securities said in a note.
Additionally, Wabag also has an L1 position of Rs 3,500 crore. This may initially have a negative impact on the stock price; however Wabag continues to be our preferred pick in the water EPC space. Any sharp correction in the stock price should be used as an opportunity to enter, the brokerage firm said.
With today’s fall, the stock price of Wabag has corrected 22 per cent from its record high level of Rs 1,943.95 that it touched on December 9, 2024. It had zoomed 234 per cent from its 52-week low of Rs 581.50 that it touched on December 21, 2023. Thus far in the calendar year 2024, the company's stock has rallied 145 per cent, as compared to the 11.7 per cent rise in the BSE Sensex.
Being a pure-play water technology multinational, Wabag offers a complete range of technologies and services for Total Water Solutions in both municipal and industrial sectors. The company is a complete life-cycle partner for building water and wastewater infrastructure, covering design, engineering, supply, construction, installation, start up and long-term operational management across various business models.