Enviro Infra Engineers stock falls 10% ahead of Q2 results, snaps five-day gaining streak

Analysts have recommended a "long-term hold" on Enviro Infra Engineers, citing its strong fundamentals and growth potential in the water treatment sector.

Shares of Enviro Infra Engineers plunged 10 percent to Rs 342.5 in the morning trade on December 18 as investors await its second quarter earnings scheduled later today. The sharp falls comes after a massive 26 percent surge during the past five trading sessions.

Enviro is a recent entrant in the market, debuting on November 29. The shares listed at a premium of nearly 50 percent over the issue price. The company’s Rs 650-crore initial public offering (IPO) garnered an overwhelming response, with a subscription of 89.90 times during its three-day bidding period.

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The company specializes in designing, constructing, operating, and maintaining water and wastewater treatment plants (WWTPs) and water supply scheme projects (WSSPs) for government authorities.

Over the last seven years, it has developed 28 WWTPs and WSSPs across India as of June 30, 2024, including 22 projects with capacities of 10 MLD or more. Its order book stood at Rs 1,906.28 crore in the June quarter, comprising 21 WWTPs and WSSPs.

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The company’s business heavily depends on WWTP and WSSP projects funded by Central and State Governments, with revenues tied to government budgets and contracts. It faces competition from several players, including VA Tech Wabag, Ion Exchange India, EMS, and Vishnu Prakash R Punglia.

With the government’s focus on water and wastewater management, Enviro is positioned to benefit. Finance Minister Nirmala Sitharaman announced in the budget that the Centre will collaborate with state governments and Multilateral Development Banks to advance water supply, sewage treatment, and waste management projects.

Analysts have recommended a "long-term hold" on Enviro Infra Engineers, citing its strong fundamentals and growth potential in the water treatment sector.

At about 11:20 am, shares of the company were trading at Rs 346, down 9 percent from the last close on the NSE. Enviro Infra Engineers stock has rallied a staggering 156 percent from the IPO price.