VA Tech Wabag hits 5% upper circuit on Rs 90 crore order win from Bahrain

VA Tech Wabag shares were locked in the 5 per cent upper circuit band of Rs 81.90 apiece on the BSE on Wednesday, a day after the company secured a five-year Operation & Maintenance (O&M) contract in Al Madina Al Shamaliya (AMAS) Sewage Treatment Plant in Kingdom of Bahrain. 

The company in its press release said that it secured 4.5 Million Bahraini Dinar (approx. Rs 900 million) order from Ministry of Works, Municipalities Affairs and Urban Planning (‘MoW’) in Kingdom of Bahrain towards Operation, Maintenance and Management of the Madinat Salman Sewage Treatment Plant (‘STP’) and Long Sea Outfall for a period of 5 years. CLICK TO READ THE PRESS RELEASE

“This is a proud moment for WABAG, as once again our execution quality has been recognized by our clientele, resulting in a repeat order towards the O&M activities. In line with our growth strategy, this new order to our strong O&M order book across the globe provides annuity income which helps us with improved cash flow and better revenue predictability,"said Deep Raj Saxena, CEO – Middle East and Africa Cluster. 

VA Tech Wabag is a water treatment company. It is headquartered in Chennai and has companies and offices in more than 20 countries.

In another news, rating agency ICRA on Tuesday revised the long-term fund-based facilities of the company to [ICRA]A(Negative) from [ICRA]A+(Negative). The Long term/ Short term: Non-fund Based Facilities have been revised to [ICRA]A(Negative)/ [ICRA]A2+ from [ICRA]A+(Negative)/ [ICRA]A1 while Long term/ Short term: Proposed facilities have been revised [ICRA]A(Negative)/ [ICRA]A2+ from [ICRA]A+(Negative)/ [ICRA]A1

"The revision in ratings takes into consideration the high level of working capital intensity of the company, which has necessitated an increase in working capital requirements of the Company led by high receivables and continued delays in realising Rs 140 crore receivables from TSGENCO due to the initiation of arbitration by Tecpro Systems Limited (erstwhile consortium leader for the BoP projects) against TSGENCO which has been challenged and stayed in Supreme court, a matter which is currently subjudice," ICRA said.  

VA Tech Wabag stock had hit a 52-week high of Rs 352.45 on July 1, 2019 and 52-week low of Rs 73 on April 7, 2020 on the BSE.