Saturday, January 9, 2010

Water treatment, access becomes fast-growing biz .....Tata Chem...@317..

Water treatment, access becomes fast-growing biz

PB JAYAKUMAR Mumbai, 8 January
Orders are flowing for the water and wastewater treatment industry, as leading players in the domestic market such as VA Tech Wabag, Larsen and Toubro, Thermax and IVRCL Infra have bagged over Rs 2,500 crore worth of orders in the past twoto-three months.

VA Tech Wabag, headquartered in Chennai with a Rs 1,200-crore turnover, yesterday said it has been awarded the contract for implementing India’s largest seawater desalination project, by Chennai Metropolitan Water Supply and Sewerage Board (Chennai Metro Water). The total cost of the project is Rs 1,033 crore and it will have a capacity of 100 million litres a day. The plant will be constructed on a DBO (design, build and operate) basis and will be commissioned in the next 24 months.

VA Tech Wabag had earlier designed and built seawater desalination plants for Adani Power in Gujarat, for Hindustan Petroleum Corporation at the Vizag Refinery, and for Gujarat Mineral Development Corporation.

“With this, our order book now stands at Rs 3,300 crore and we expect another Rs 500-600 crore of orders within the coming three to four months,” Rajiv Mittal, managing director, told Business Standard.

The Indian water treatment business is estimated to be about Rs 2,000 crore and growing at 15-20 per cent annually. This includes the Rs 1,200crore industrial water treatment sector and the Rs 800-crore point-of-consumption market, which involves localised water treatment.

PSL Ltd, the largest manufacturer of pipes in India, today announced it had bagged orders worth over Rs 425 crore in the past 10 days for the manufacture of pipes for water supply projects from infrastructure companies like L&T, Lanco, Nagarjuna Construction Company, Subhash Projects (SPML), and South East Constructions.

“We expect various infrastructure players to place orders worth Rs 2500 crore for pipes for water supply projects within the next 18 months,” said Ashok Punj, managing director of the Rs 3,600 crore turnover PSL, which controls over half of the pipe market in the country.

In another announcement, IVRCL Infra and Projects yesterday said it had bagged infrastructure projects worth Rs 958 crore, which includes a Rs 253-crore order from the Gujarat government’s Gujarat Water Infrastructure for implementing the NC-24 water supply scheme in the state. The company also bagged a Rs 142.35-crore contract from Cauvery Neeravary Nigama and another Rs 133.64 -crore contract from Bangalore Water Supply and Sewerage Board (BWSSB). With these, the company’s overall order book now stands at Rs 22,000 crore, IVRCL said in a filing to the Bombay Stock Exchange.

Last week, engineering and construction major Larsen & Toubro had said the company got a Rs 189-crore order from the BWSSB. The contract includes fabrication and laying of a mild steel pipeline. The scheme, funded by Japan International Cooperation Agency, envisages transmission of 500 million litres per day of clear water from the river Cauvery (Shiva Balancing Reservoir) to Bangalore. The project, to be completed in 24 months, involves laying a pipeline from Harohalli to Tataguni and Vajarahalli, along with associated civil work.

L&T’s water and water treatment business are handled by the Metallurgical, Material Handling and Water Operating Company, a part of its construction division. In October, the Uttar Pradesh Jal Nigam had entrusted L&T with a Rs 488-crore order for implementing projects under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), a massive city modernisation scheme funded by the Government of India. Of this, Rs 274 crore will go to provide a sewage system to Varanasi city in 30 months, another Rs 121 crore to provide water supply to Allahabad city in 24 months and Rs 93 crore to a wastewater management system for Mathura town, also in 24 months.

The allocation for JNNURM was increased by 87 per cent by the Union government for 2009-10 to Rs 12,887 crore. It had sanctioned 463 projects requiring an investment of Rs 49,743 crore, ( That is a BIG Figure...)mainly for basic urban services like water supply, sewerage and stormwater drainage. Agencies such as the Asian Development Bank, World Bank and Japan Bank for International Cooperation are also funding water and wastewater treatment projects.

Another leading player in the segment, Pune-based power solutions player Thermax, had bagged Rs 155 crore worth of orders for sewage treatment in Maharashtra and in Jammu and Kashmir.
The Indian water treatment business is about Rs 2,000 crore and is growing at 15-20 per cent annually .


My Comments:
There will be big gap coming up for the water treatment for Ind purpose as well as commercial use.
Ion Exchange where RJ has taken stake looks good , Tata Chemical looks extremly good to me as it has just put its "Swatch " titled water purifier in market which is going to be growth driver for Tata Chem in years to come.Moreover,with food grain scarcity coming on in world , more and more fertilizer will be needed perticularly Co using Potash for making Fertilizer will have field day.....and Tata Chem is one of them.
I think Tata Chem is a multibagger in making from hereon.
I remember I gave a call on Tata Power at mmb in last bull run around 300-400 and it went on to touch 1300-1400...and then came down in 2008 and again is back at 1400...I am seeing the same rerun in Tata Chem....Future looks extremly bright for Tata Chem.....These are my views and I may prove wrong in big way....
Actually I was trying to write on Tata Chem but was waiting for appropriate opportunity and this article gave me that .....Rest of the Due Diligence I leave it for my readers.....

What I would like to see here is how many readers read this news in BS paper today and how many makes out from it, the analysis.....see everyone reads the news in paper but how one interprets is important.How much one can apply information one have in mind ,can again able to recall and try to corelate with the NEWS one read, is important.......
I gets lots of mail asking me how they can do things I am doing....first try to read business papers as much as you can, like ET,BS,FT etc and then read stock market Magazine like Business India, Business World, Capital Market , Business Today, Money Life etc.....read them properly...I have written in past but just repeating for new readers.........I never missed a single issue of Business India and Capital Market Magazine as I was subscriber of those.Then I always bought 2 business papers , viz:ET and BS and will go to library and read FT and other Magazines.....These are the basics and intial steps for climbing up the ladder ....As a matter of fact , I can say that, how many times I have read the Capital Market Magazine Score Board , I can't say...I use to go through the Score Board umpteen times......now don't ask me what needs to be looked in it....try to find of your own what needs to be read....it is all trail and error....and from that learning...
Gather as much information as much you can from the world market, try to read what is happening in the world, what is in demand and what is going out of favour.These all helps .....what readers are seeing is not a mere 2-3 yrs of hard work.It is a long way for my take in stock market and I developed it with experiance......and let me write ,that not all can do that , like someone having same experiance like me and still maybe not as good as me.It depends upon ones PASSION...I always thrive in search of new sector , a niche sector and a Co having niche product which if successful can do wonders for the bottomline....

Updates on JSW Energy Ltd : First time after the IPO, one of the brokerage has come out with a buy report for JSW Energy which vindicates my call that JSW Energy can be applied on IPO...


6 comments:

  1. Hi Rajeev,

    Hope you are doing fine.
    Any comments on Meghmani organics, Its am Aditya birla company. Consolidating on CMP 17. Having a book value of 17. I think any time from now the operators can jackup the price.

    Your comments will be very helpful in taking any decision.

    Cheers,
    Varun

    ReplyDelete
  2. Varun,
    Meghmani is 1 paidup and hence we can say the price is 170, 10 paidup.
    Now when many Co has great earning and still available at below that rate why go for 1 paidup?Like say Excel Crop has an EPS of 25 was available at 115 , and great gr of United Phosphorus, Shroof gr then why not buy Excel Crop?
    Hence I do not track Meghmani.I don't say it will not run but I am not interested here.....

    ReplyDelete
  3. Hi Rajeev,
    is VA tech wabag a listed company?
    I was not able to find it.
    Vikas

    ReplyDelete
  4. hi rajeev
    r jct@7, sks logistics @34 still hold.i have allways benefitted from ur calls except in these two and allied comp(that i sold off after u cautioned about their management)if they r stiil worth holding then i woudnt mind holding them for any length of time.thanks
    raima

    ReplyDelete
  5. raima,
    With Textile coming back in favour, JCT can again become a dark horse.Hold SKS.....

    ReplyDelete