Water Recycling: Profiting Through Changing Future of Water

Published by Sharekhan Education | April 17, 2023

Amit Pathak| Sharekhan Education

Introduction:

Benjamin Franklin said – ‘When the well is dry, we know the worth of water’. Extreme heat waves and dreadful droughts have led to acute water shortages in various parts of India. Water recycling is emerging as the long-term solution to this problem. Water recycling is the process of treating wastewater to varying degrees and reusing it for irrigation, toilet flushing, groundwater replenishment, environmental restoration, and industrial processes. It will reduce the pressure on freshwater sources. Wastewater treatment by-products can also fuel energy generation and benefit agriculture.

Growth Prospects:

India is one of the largest extractors of groundwater worldwide, to the tune of 25%. As per a report by Observer Research Foundation, the demand for water in India is expected to grow at a 2.8 % CAGR in this decade, facing a potential supply gap of 50 % by 2030. The Wastewater Treatment Plant market is estimated to grow at 6.9% CAGR over 2021-26. Municipalities in coastal areas are treating seawater and generating potable water so that people can get clean drinking water. Experts estimate that the desalination market will experience a 9.3% compound annual growth rate (CAGR) from 2020 to 2026.

Indian government. has launched various initiatives like the Namami Gange Program, Jal Jeevan Mission, and National River Conservative Plan. Under Namami Gange Program the govt. has focused on the river Ganga’s conservation and rejuvenation and pollution abatement. Govt. is offering to create and maintain sewage treatment infrastructure under a hybrid annuity‐based PPP model under National Mission for Clean Ganga. Swachh Bharat Abhiyan is playing an important role in addressing the concern of wastewater treatment. National Water Policy aims to increase the reuse of treated wastewater to 50% by 2030. The govt. has also launched various initiatives like Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for promoting water recycling and improving water infrastructure in urban areas.

About VaTech WABAG:

Let us discuss VaTech WABAG in this space. The company actively conducts business in wastewater treatment, industrial water treatment, and desalination treatment. It is present across the value chain of water solutions including R&D, design & technology, marketing, engineering, procurement, construction and commissioning, and operations & maintenance (O&M). They have a global presence in more than 25 countries. It has developed 125+ IP rights for water treatment technology solutions. The company is expected to deliver Revenue/EBITDA/PAT CAGR of 10%/15%/20% respectively over FY22–25E on the back of a healthy order book, stable EBITDA margins, strong execution capabilities, and fast-increasing budget allocation by the govt. to the sector.
Source – Company Presentations and Consensus Analyst Estimates.
To gain more knowledge of investing attend our free Power Money Workshops.

Disclaimer:

Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer and registered office details visit link – https://www.sharekhan.com/disclaimer/Sharekhan_Education.html

By Enrolling yourself in this stock market course, a learner can learn the basics and the various aspects of trading in Futures and Options Trading.