Indian Hume Pipe surges 18% on winning work order worth Rs 228 cr

The company in association with AMR India and Shoda Constructions has secured Rs 1,138 crore work order related to water supply projects & sewerage projects under AMRUT 2.0 by Government of Telangana.

Shares of Indian Hume Pipe (IHP) surged 18 per cent to Rs 279 on the BSE in Thursday's intra-day trade amid heavy volumes after the company won an order worth Rs 228 crore.

At 11:14 am; the stock was quoting 15 per cent higher at Rs 272.95, as compared to 0.32 per cent rise in the S&P BSE Sensex. The average trading volumes at the counter jumped over four-fold. A combined 1.3 million equity shares of the company changed hands on the NSE and BSE.

The stock of the industrial products company had hit a 52-week high of Rs 325 on February 26. In the past one year, the stock has more-than-doubled or zoomed 120 per cent. In comparison, the S&P BSE Sensex rallied 26 per cent during the same period.

In an exchange filing, Indian Hume Pipe said the Joint Venture (JV) formed between the AMR India, Shoda Constructions Private Limited and IHP has been awarded the work order relating to water supply projects & sewerage projects under AMRUT 2.0 by Government of Telangana. The value of the work order awarded is Rs 1,137.77 crore (excluding GST) and the share of works to be executed by IHP is 20 per cent i.e. Rs 227.55 crore (excluding GST).

As on January 31, 2024, the estimated balance value of the work of IHP was Rs 3,309.62 crore, which provides adequate revenue visibility in the near to medium term. The company had said it was L1 in two projects having a value of Rs 1,092.71 crore.

IHP is engaged in providing engineering, procurement, construction and commissioning services in water supply, irrigation and sewerage related projects. The company has presence in almost all water supply related activities, viz. urban & rural water supply, penstock for hydro power generation, tunnel lining, large diameter Irrigation pipelines, head works including pumping machinery, treatment plants, overhead tanks, and other allied civil construction.

In June 2019, the government set an ambitious target of providing Functional Household Tap Connection for all rural households by 2024 under the Jal Jeevan Mission (JJM). Total estimated cost of JJM is Rs 3.60 trillion.

IHP operates in the water pipeline segment where this scheme is announced. There is a significant scope of additional water supply works under the scheme in various states like Uttar Pradesh, Jharkhand, Rajasthan etc.

Driven by the Government initiatives and rising demand, the Indian water sector has witnessed several successful Public Private Partnerships and Engineering Procurement Construction projects in the last decade, proving that the country has a favorable investment ecosystem in the domain. This provides a great opportunity to the companies offering innovative technologies and solutions that could address the impending water situation in the country.

India also has immense potential for the development of Sewage Treatments Plants, desalination projects, and other wastewater treatment and reuse projects over and above the development of drinking water supply infrastructure. This will be beneficial to companies like IHP, Infomerics Valuation and Rating Private Ltd (Infomerics) had said in rating rationale.