This multi-bagger is down 30% from recent highs, but should you buy the dip?
Subscribe to enjoy similar stories. VA Tech Wabag Ltd, a desalination and water treatment company, grabbed headlines on Monday as its stock rallied by as much as 14%. That rally was in celebration of the company securing part of a ₹3,251 crore order for constructing an independent sewage water treatment plant in Saudi Arabia.
The company, which was founded a century ago, has established itself as the world’s third-largest private water operator and desalination plant supplier. It has executed more than 1,500 water treatment plants globally since 1995. VA Tech Wabag is no stranger to steep spikes in its share price.
It has been grabbing increasing investor attention since it made its way into the portfolios of a few well-known investors, including Rekha Jhunjhunwala. Propped up by order-wins, the stock quickly emerged as a multi-bagger, almost quadrupling investor wealth in a little more than a year—from October 2023 to December 2024. Also read: LIC is India’s most privileged insurer.
So why is it losing its way? Even over a longer period, since the lows of the pandemic, the stock has delivered a 95% compound annual growth rate—from about ₹80 per share to reach a lifetime high of ₹1,905 in December 2024. But in December, a tender worth more than ₹2,700 crore from Saudi Arabia got cancelled. Although it was a tender cancellation as the client recalibrated the project’s specifications, rather than being an order cancellation, this abruptly disillusioned investors.
The stock has corrected by 30% since then. Even the announcement of the retendering of the cancelled project and the latest order of more than ₹3,000 crore could not hold investor interest. By the time the markets closed on Monday, concerns around Wabag’s limited
. Read more on livemint.com
