Shares of VA Tech Wabag rallied over 15% today after global brokerage Nomura raised its target price for the water treatment firm. Ace investor Rakesh Jhunjhunwala owned 50 lakh shares or 8.04% stake in VA Tech Wabag on behalf of his wife Rekha Rakesh Jhunjhunwala at the end of December quarter of the current fiscal.
He bought stake in the company for the first time in August 2020. The stake purchase was a part of fund raising exercise of the water treatment firm. VA Tech Wabag issued 50 lakh shares to Rekha Rakesh Jhunjhunwala.
Meanwhile, the stock opened with a gain of 4.89% at Rs 310 against the previous close of Rs 295.5 on BSE.
Later, the small cap stock touched an intraday high of Rs 340, rising 15.04% on BSE.
The share trades higher than 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.
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Total 1.82 lakh shares of the firm changed hands amounting to a turnover of Rs 5.92 crore on BSE. Market cap of the firm rose to Rs 2,008 crore on BSE.
The stock hit a 52 week high of Rs 404 on August 3, 2021 and a 52 week low of Rs 228 on March 25, 2021.
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Nomura has assigned a buy call to the stock with a new target price of Rs 634, implying a gain of 115% to the previous close. The firm logged a robust Q3 performance with an improvement in EBITDA margins.
The company has undertaken strong debt reduction and has clocked over 10% EBITDA margin.
Its focus on securing tech-focused orders is a key positive for the firm, the brokerage said.
The company's focus on tech-focused orders with low civil component, could improve both margins & cash flows, the international brokerage house said.
The firm reported a consolidated profit of Rs 44.16 crore for the quarter ended December 31, 2021 compared with a profit after tax of Rs 41.78 crore in the corresponding quarter a year ago. Revenue slipped 6.35% to Rs 745.84 crore in Q3 against Rs 796.02 crore revenue in the third quarter of previous fiscal.
The company is engaged in water treatment field. Its principal activities include design, supply, installation, construction and operational management of drinking water, waste water treatment, industrial water treatment and desalination plants.
Also read: Rakesh Jhunjhunwala made Rs 7 crore with this stock in 2021