Water crisis looming in future: How to profit from it

2098 Investors following Ion Exchange. Share this News with them.

0

Like this story, share it with millions of investors on M3

Water crisis looming in future: How to profit from it

The recent media reports of a looming water crisis in urban areas in the country have not managed to wake up the slumbering population from a stupor which will probably hit them with a magnitude that will be at best unbearable at a later date.

Post your opinion here

 

0

Tweet

Share on Tumblr

Nifty BSE | NSE 31/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Mount Everest Mineral Water |

By Technical Analyst Vijay Bhambwani:

The recent media reports of a looming water crisis in urban areas in the country have not managed to wake up the slumbering population from a stupor which will probably hit them with a magnitude that will be at best unbearable at a later date. The quality of life is fast deteriorating in the metros and over population is causing a load factor that infrastructure can clearly not match. If you have been aquatinted with Robin Griffith, William Houston and Amita Baviskar, you would know that our water tables are rapidly depleting. Conventional methods like digging deeper with bore wells will no longer help. The law of diminishing returns is already at play. Click here to know more.

Once our aquifers have hit peak yield loads, depletion of water will hit everyday life very hard indeed. I read reports about restaurants starting to serve half glasses of water to patrons to curb wastage! The municipal commissioner has advised citizens to bathe once a day only to conserve water! Read report here.

If this crisis gets out of hand, our lifestyles will suffer changes that we are not ready to make yet. We Indians cannot think of using perfumes instead of a bath and our tropical climate will mean skin disorders in the absence of regular baths. Kidney disorders will jump if potable water supply depletes or is contaminated beyond the power of our kidneys to filter. The human body is over two thirds water, naturally health problems will be galore.

There is a shocker about water - in times of scarcity, the rich will buy and guard it, the poor will steal it and the middle class will fight and / or die for it !

In this scenario of gloom and doom is there a ray of light somewhere ? Yes ! water purification companies that are suddenly likely to witness the next big boom. Companies like ION Exchange , Mount Everest Mineral Water , Parle (Bisleri), Pepsi and Coca Cola India will reap bonanzas that will stun investors. If the corporate governance in these companies is high and reporting of profits is fair, these will be the next big investment opportunities. There will be many downstream opportunities in the coming years, ancillary units that supply chemicals to purifying companies, make their plants and supply spares etc.

When adversity strikes, you can either panic and run or think calmly and try and profit from it.

The columnist is the author of the book A Traders Guide to Indian Commodity Markets and invites feedback at vijay@BSPLindia.com or (022) 23438482.

Click here to buy the book

Disclosure: The analyst has investment exposure to the listed stocks mentioned above and therefore has a vested interest in this recommendation.