Shares of small cap company – Va Tech Wabag, with an 8.04% stake held by Rakesh Jhunjhunwala, surged in trading as high as 15.59%. Later, the action at the close ended with gains of 8.75% at Rs. 321.75 per share.
The company in the third quarter ended December showed good performance. The company’s net profit increased slightly both sequentially and year-on-year to Rs. 30.18 crores from Rs. 28.11 crores.
The surge in share prices during today’s session was also influenced after Nomura raised its share price target to Rs. 634 per share, up 97% from at current levels. The increase in the mix of industrial and international order projects, as well as the pace of execution, contributed to the improvement in operating margins.
In addition, the company’s margin of more than 10% and the strong reduction in debt are among its main positives, says Nomura. The foreign brokerage values Va Tech Wabag at 15x FY24F EPS of Rs 41.8 and adds the book value of the hybrid annuity model assets to arrive at the aforementioned fixed target price.
VA Tech Wabag is a multinational water treatment entity with presence in India, India, Middle East, North Africa, Central and Eastern Europe, China and South East Asia through main offices in India, Austria, Czech Republic, China, Switzerland, Algeria, Romania, Tunisia, United Arab Emirates, Libya and Macao. The company offers a full range of solutions including conceptualization, design, engineering, procurement, supply, installation, construction and O&M services.
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Article first published: Wednesday, February 16, 2022, 5:50 p.m. [IST]