VA Tech sees O&M as a major growth driver in water management

VA Tech Wabag expects to see a significant growth in revenue in operation and maintenance of water management infrastructure in the current year.

Addressing the company’s annual general meeting Chairman Bhagwan Dass Narang said Wabag is “building the O&M line as a major driver which will contribute substantially to this year’s topline.”

Wabag is a Chennai-based multinational in water infrastructure providing water management and waste water recycling solutions with a consolidated business of ₹2,240 crore in 2013-14 with about 20 per cent from the O&M business. While orders for water infrastructure projects for public sector utilities and industrial units can be relatively unpredictable or come in a bunch, revenue from O&M business is a predictable flow, which is a significant benefit.

Rajiv Mittal, Managing Director, in a recent interaction with BusinessLine pointed out that in the case of the Nemmeli desalination plant the company established for Chennai Metro water, a public sector utility, Wabag can invoice ₹80-85 crore annually during the course of the seven-year operation and maintenance contract.

But, though the EPC contract for the same desalination plant was about ₹871 crore, such orders take time to happen.