It is expected that a business worth Rs 20 lakh crore will be created due to water crisis.
The water crisis in India is becoming deeper, but even in this crisis, a big business worth lakhs of crores of rupees is hidden. Which can make a big contribution in boosting the country’s economy in the coming days. According to a report by Prabhudas Lilladher, India’s increasing water scarcity and the need for investment of about Rs 20 lakh crore in the next decade are creating long-term growth opportunities for water infrastructure companies. The sector is expected to get support from good order book, strong earnings potential and continued government spending. The brokerage said that India is home to about 18 percent of the world’s population, but has only 4 percent of the world’s freshwater resources. Therefore, water security is an urgent priority regardless of economic or political fluctuations.
Demand doubles supply
According to the report, by 2030 the demand for water may be almost double the available supply. For this, an investment of more than Rs 20 lakh crore will be required in the next decade in drinking water supply, sewage treatment, wastewater recycling, desalination, storage and distribution infrastructure. It is expected that India’s water and wastewater treatment technology market will grow from about $3 billion in FY 2025 to $5.2 billion by FY 2031, which means its compound annual growth rate (CAGR) will be about 10 percent. Expenditure on industrial water and wastewater infrastructure is also expected to increase by approximately 8 percent annually by 2030. The reason for this is the strict discharge rules, Zero Liquid Discharge (ZLD) rules and increasing water consumption in industries.
Budget provision for water
Government programs play an important role in increasing demand. The Jal Jeevan Mission has an annual budget of around Rs 67,000 crore, while the Jal Shakti Ministry has been allocated around Rs 99,500 crore for FY 2026. The budget of the AMRUT 2.0 urban water scheme is around Rs 2.99 lakh crore, while Rs 22,500 crore has been allocated for sewage treatment and river rejuvenation under Namami Gange Phase II. The brokerage has considered sewage treatment as one of the biggest opportunities in this sector. India produces about 72,000 million liters (MLD) of sewage every day, but the treatment capacity is only around 27,000 MLD. This means that approximately 70 percent of sewage remains untreated, which shows a major deficiency in infrastructure.
many companies in line
- The report said that listed companies are well positioned to benefit from this investment cycle, although the growth and valuation profiles of each company are different. VA Tech Wabag, India’s largest pure-play water technology company, trades at 25.8x FY26 earnings and 15.4x EV/EBITDA. It has an order book of Rs 17,200 crore, which is about 4.4 times its FY26 revenue of Rs 3,944 crore, and a net cash position of Rs 950 crore. Management has estimated annual revenue growth of 15-20 percent, and expects profit growth to exceed revenue growth.
- Enviro Infra Engineers, which has a valuation of 16.8 times earnings and 10.2 times EV/EBITDA, has recorded a CAGR (compound annual growth rate) of about 50 per cent and 55 per cent in revenue and profits, respectively, during FY 2023 to 2026. Its order book of Rs 6,814 crore is almost six times its FY26 revenue, providing visibility of revenues for the next two years. The company has also expanded its business in the field of renewable energy through the acquisition of Suyog Urja.
- Denta Water and Infra Solutions is trading at 11x Earnings and 6.8x EV/EBITDA, making it the cheapest of the three companies covered. It recorded EBITDA margins of over 33 per cent in FY26 and has an order book of Rs 728 crore, which is almost three times its annual revenue. Of this, about 73 percent is related to government-supported water management projects.
earning opportunity
According to the report, sustained public investment, tightening environmental regulations, rapid urbanization and increasing demand for water in industry establish water infrastructure as a long-term investment theme, providing growth opportunities for companies in this sector for many years.
