Va Tech Wabag hit an upper circuit of 5% at Rs 81.90 after the company said it secured a five-year operation & maintenance contract in Al Madina Al Shamaliya (AMAS) sewage treatment plant in Kingdom of Bahrain.VA Tech Wabag on Tuesday (7 April) said it has secured 4.5 million Bahraini Dinar (approximately Rs 90 crore) 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 and long sea outfall for a period of 5 years.
Commenting on this order, Deep Raj Saxena, CEO-Middle East and Africa Cluster said, The new order provides annuity income which helps us with improved cash flow and better revenue predictability.
In a separate announcement on Tuesday, the company said that ICRA has revised its long term fund based facilities rating of the company to ICRA A (Negative) from ICRA A+ (Negative).
Non-fund based facilities (long/short term) is revised to ICRA] A(Negative)/[ICRA]A2+ from [ICRA]A+ (Negative)/[ICRA]A1.
Proposed facilities (long/short term) is revised to [ICRA]A(Negative)/[ICRA]A2+ from [ICRA]A+(Negative)/[ICRA]A1.
The company's liquidity continues to remain adequate with cash flow which witnessed an improvement in 9MFY2020 and cash balance as on 31 December 2019 stood at Rs 310.2 crore, of which Rs 229.2 crore is free cash. The ratings continue to positively factor in the established position of company in the water infrastructure business, equipped with the technical know-how of proprietary, licensed technology, a strong management team and comfort from the healthy order book worth Rs 10,800 crore as on December 2019, which provides revenue visibility for the company in the medium term.
On a consolidated basis, the company's net profit surged 99.61% to Rs 30.78 crore on a 2.65% decline in net sales to Rs 679.44 crore in Q3 December 2019 over Q3 December 2018.
VA Tech Wabag act as a systems specialist and full service provider with a focus on the planning, installation and operation of drinking and waste water plants for local government and industry in the growth markets of Asia, North Africa, Middle East, the Central and Eastern Europe.
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