Shares of VA Tech Wabag Ltd are in focus on Wednesday morning after its Saudi customer cancelled the Rs 2,700 crore order that the company announced in September this year. The order pertains to the proposed 300 mega liters per day seawater desalination plant in Yanbu, Kingdom of Saudi Arabia.
VA Tech Wabag said the customer has now notified all tender participants on December 16, 2024, that the said tender stands cancelled pursuant to their internal administrative procedures. "We are currently in touch with the customer to understand and comprehend the reasons in detail," it said.
Saudi Water Authority, formerly known as Saline Water Conversion Corporation (SWCC), manages over 15 million cubic meters of water, mainly in 40 desalination plants, and also some ground and surface water purification stations. The plant VA Tech Wabag was proposed to be engineered for exceptional water quality and power efficiency. It was scheduled for completion within 30 months.
"This project commences our relationship as a reliable water partner for Saudi Water Authority," the company management said in its conference call post Q2 results.
"Looking ahead, we are further enhancing our presence and efforts in the emerging markets like Middle East, Africa, Indian subcontinent, Southeast Asia and CIS countries. With promising order pipeline, we are confident in sustaining our growth momentum through the second half of the financial year and in line with our medium-term outlook," it said o November 8
VA Tech Wabag said its focus business development efforts were yielding remarkable results as demonstrated by the order inflow of over Rs 4,600 crores secured in H1 with 57 per cent coming from international clients and 31 per cent coming from industrial sector.
"With over Rs 8,000 crores order inflow outlook already in sight for this financial year, we are on track to reach an order book position of over Rs 16,000 crores by the end of this fiscal year. Our order book position which stands today at over Rs 14,500 crore as of H1 with a healthy mix of 59 per cent EPC projects and 41 per cent O&M projects provides a robust revenue and growth visibility," the company said earlier.