Is your tap on when you’re brushing your teeth or shaving? Most people would say “yes.” But, will you keep your air-conditioner or geyser on when not in use? Well, the answer will be “no” because there is a metre ticking and you have to pay the bill.
So, water is taken for granted and what you don’t value, you don’t conserve. Various estimates indicate that several gallons of water could be saved every day by doing simple things like closing the tap while brushing, shaving or smearing soap while bathing.
“Though it is very precious, water is the most neglected resource,” says Rajiv Mittal, Chairman and Managing Director of BSE-listed Va Tech Wabag (known as Wabag) Ltd, a Chennai-headquartered, Indian multinational, water technology firm that provides water treatment solutions.
Among the top ten players globally in water treatment, Mittal knows more than enough about the water scenario. The statistics present a scary picture. India has only 4 per cent of the world’s freshwater against 16 per cent of global population. Nearly one-fourth of the world’s groundwater is drawn by India. About one-fifth of communicable diseases in the country are related to hazardous water. It is shocking to note that more than nine people in India lack access to safe water. As per NITI Aayog estimates, 40 per cent of India’s population will not have access to safe drinking water by 2030.
Reeling off these grim statistics, Mittal says that once India builds economics into water, conservation and protection will gain importance. Of course, a good number of Indian States, city corporations and local bodies, among others, have started putting up water metres and charging for water consumption. He points out that there are a few pillars for ensuring water security. Firstly, conserving the available water itself. Second is rainwater harvesting. This was pioneered in Tamil Nadu when the late J Jayalalithaa was the Chief Minister of the State. This worked very well for Chennai.
Another important area where Wabag, as a water technology company, has a role to play is in “manufactured water.” The company classifies water into two areas. One is water from rains, glaciers. The second one is where Wabag produces potable water and its desalination technology comes in handy. This is drought-free and climate change-free and available on tap.
In wastewater treatment, though the treated water is perfectly potable, there is a reluctance by the public to accept it for drinking purposes since it is produced from sewage. So, as a first step, this treated water from sewage sources is given to non-potable purposes by industries and commercial establishments. “By giving them this water, we are releasing the potable water to improve supplies for cities,” says Mittal.
Wabag-built 45-MLD TTRO (Tertiary Treatment Reverse Osmosis) plant in Koyambedu, Chennai, which was inaugurated in 2019. It is one of the largest and most technologically advanced water reuse plants in India. It treats municipal water to potable water.
watering needs
As a specialist, Wabag says desalination plants are seen as reliable, affordable and sustainable solutions for addressing water needs while reducing the stress on traditional sources. It has built 68 desalination plants across the world in addition to 474 sewage treatment plants, more than 170 industrial wastewater units and 320 plus drinking water treatment projects.
The ₹2,960 crore Wabag has been rated as the sixth largest player globally in the desalination space. With global R&D centres in India and Europe, it has more than 125 IP rights, developed in-house for water treatment technology solutions.
While desalination is yet to take-off in a big way in India, Tamil Nadu has shown the way for other States on how desalination can ensure water security.
Wabag is constructing what is described as South-East Asia’s largest desalination project — a 400 mld (million litres a day) desalination plant at a cost of ₹4,276 crore at Perur near Chennai. This plant is expected to be commissioned by December 2026. “With this plant, one-fourth of Chennai’s population will be taken care of. If you include the other three desal plants in Chennai, about half the city population’s water requirements will be met,” says Mittal.
He also cites the successful outcomes of desalination projects built by companies like MRPL (Mangalore Refinery and Petrochemicals Ltd) and Chennai Petroleum Corporation Ltd.
“MRPL used to shut its refinery for about two months during the summer due to unavailability of water. They decided to put up a desal plant four years ago and we commissioned it last year. This summer, the refinery was operating without a single-day closure. This has had a positive impact on the company’s bottom line. The board has now approved the expansion of the desal unit and we are executing it now,” explains Mittal.
With over 6,500 projects executed across 25-plus countries, WABAG has a presence across the Indian subcontinent, the Middle East and Africa, the European region and South-East Asian markets. It has been facilitating access to clean and safe water to about 9 crore people.
With growing traction in the water technology space, the company’s financial performance has also been improving. Helped by a steady flow of revenue, the company cut its debt by half to about ₹210 crore in FY23 crore from ₹430 crore in FY22.
The group generated net cash of ₹100 crore in FY23, achieving a net cash-positive position for the third consecutive year. Its share value was about ₹453 a piece on October 6, 2023 on the BSE.
Bulking up
“The past three years — FY21, FY22 and FY23 — have been good for us. We believe that this trend of improving our bottom line, cash and order book will continue for years to come and we have already shown in the first quarter results,” Mittal says. He is is hopeful that the company’s financial performance is sustainable. As the company completed some key decisions under its strategic growth programme, “Wriddhi”, which has started already paying dividends.
Given the growing attention of the government and multi-lateral funding agencies towards an escalating water shortage crisis, the water treatment sector is well poised for a secular, long-term growth. Analysts at Yes Securities are of the opinion that WABAG’s robust order book, thriving on strong market leadership, execution ramp up and operational efficiencies, would help it capitalise on the forthcoming opportunities.
With an order intake of ₹730 crore in Q1 of this fiscal, the company’s total order book size is more than ₹12,500 crore, of which Indian projects accounts for 69 per cent, while the rest is in various international geographies.
“To me, desalination is no longer a choice. It’s a must for India. When investing in desalination plants, you are investing in future, quality of life, health and safety of people and generations to come. Like Tamil Nadu, all coastal cities can take up desal projects as there will not be a need for running water trains, tankers when traditional sources fail,” explains Mittal.