VA Tech Wabag expects to conclude the current financial year with an order book of about Rs 4,000 crore, supported by private sector order flow on water management infrastructure.
The Chennai-based water management company, which has a multinational presence, will see an order intake of about Rs 1,800-2,000 crore in the current year, a market guidance that remains unchanged, according to Mr Rajiv Mittal, Managing Director, VA Tech Wabag.
As of September, the order book stands at about Rs 3,300 crore, which is a two-year backlog.
In addition, VA Tech is a preferred bidder in contracts valued at over Rs 1,100 crore for which negotiations are on with the clients. The company expects to close these orders in the second half of the current year.
Order booking has been slow in the first half for the company primarily due to a drop in flow from the public sector utilities. However, with the government policies focussed on water recycling for industrial applications to conserve drinking water, the private orders are picking up, particularly from steel and oil and gas sectors, says Mr Mittal. This is also set to drive water treatment infrastructure in public sector soon.
Power sector too is contributing to some extent, he said.
Set to rebound
However, public sector order flow is set to rebound — till recently they constituted a major share of the orders for water management projects. The company is focussing on BOOT (Build-Own-Operate-Transfer) and the relatively newer TOT (Transfer-Operate-Transfer) projects in which public water utilities are transferred to be operated by the private sector.
VA Tech Wabag is set to get into BOOT-based drinking water projects through two separate joint ventures in Maharashtra, a new area of operation.
It will handle the entire drinking water supply in Ulhasnagar in partnership with Konark Infrastructure and Aurangabad along with SL Infrastructure and SPML of the Subash Chandra Group.
The 195-million litres a day (mld) water supply project for Ulhasnagar represents an EPC component of Rs 100 crore and a O&M component of Rs 230 crore over 30 years. In the Aurangabad water treatment project, the 192 mld projects include Rs 55 crore EPC and Rs 72 crore O&M for 17 years, he said.