Sunil Singhania does not need an introduction in the investor’s community, but he is known for his strategic focus on midcap and smallcap stocks across varied industries, his investment philosophy is all about uncovering undervalued companies with strong fundamentals and significant growth prospects, driven by thorough research and keen market trend analysis.
He skilfully balances risk and reward, curating a portfolio that blends cyclical and growth-oriented sectors to achieve consistent wealth creation, cementing his reputation as a leading figure in the Indian investment landscape.
So, when he buys a stake in a company, it deserves all the attention.
Incorporated in 2016, Denta Water & Infra Solutions Ltd is in the business of GWR (Water Management), Irrigation, O&M pertaining to water projects.
The company specializes in water engineering, procurement, and construction services, focusing on infrastructure projects. Plus, it designs, installs, and commissions water management systems, with a strong emphasis on groundwater recharge using recycled water.
Additionally, Denta Water & Infra Solutions Ltd undertakes construction projects for railways and highways. With its expertise in the design, installation, commissioning, operation, and maintenance of groundwater recharge systems utilizing recycled water, it is a known name in its vertical.
The company was listed recently in January 2025, with a current market cap of Rs 806 cr. The current financials of the company are expected soon with the exchange filings deadlines approaching, but as per screener.in, in November 2024 the company’s order book stood at over Rs 1,100 cr.
India’s Warren Buffet, ace investor Sunil Singhania just bought a 1.3% stake in the company via the Abakkus Diversified Alpha Fund.
The company was listed recently in January 2025, and also has a 1.9% holding by FIIs (Foreign Institutional Investors) and another 5.11% holding by DIIs (Domestic Institutional Investors, including Abakkus)
The question is what is it that caught the attention of an investor of the calibre of Sunil Singhania.
One front where the company shines and which could be the reason for the stake by Singhania could be the company’s capital efficiency.
The ROCE (Return on Capital Employed) is a huge 61%, which means for every Rs 100 Denta Water & Infra Solutions Ltd invests as capital in the business, it makes a profit of Rs 61 on it. This while the industry median when compared to peers’ hovers around a meagre 7.5%.
And that is the current number only!
If you look at the 10-year ROCE, the company has recorded almost 98%. Once again beating the industry median, which is even lower at 5.5%.
A high ROCE gives the company freedom to invest the returns back into the business and take it to the next level or pay its stake holders in the form of dividends. Or pay off their debts and be free form the additional financial stress of paying interest costs.
Denta Water & Infra Solutions Ltd has probably done just that as the company is almost debt free. In simple words, a true king of capital efficiency, getting the most for every rupee spent.
Now wonder it caught Singhani’s attention.
The financials also look like something that could have grabbed Singhania’s eye.
If we look at the sales, in FY21, the company recorded Rs 32 cr in sales, which grew to Rs 239 cr in FY24, logging in a compound growth of a huge 95%. And between April and December 2024, the company has recorded sales of Rs 99 cr already, giving clear signals of an upcoming good quarter and fiscal year.
The EBITDA (earnings before interest, taxes, depreciation, and amortization) is another story that screams for attention. From Rs 15 cr in FY21 to Rs 79 cr in FY24… A compounded growth of 74% in just 3 years. A number that can only generate envy amongst competitors!
For 9MFY25, Denta Water & Infra Solutions Ltd has logged in Rs 33 cr in EBITDA.
Let us talk profits now… From Rs 11 cr in FY21 to Rs 60 cr in FY24, the company logged in a compounded profit growth of 75% in 3 years. And between April and December 2024, profits of Rs 26 cr have been recorded.
As on the closing for 17th April 2025, the share price of Denta Water & Infra Solutions Ltd was Rs 302, which is a drop from its January 2025 listing price of around Rs 340.
Now this could also very well be because of the brutal crash the market is witnessing. The company has seen an all-time high price of Rs 378 in February 2025, before the crash came knocking.
Now, it would be too soon to judge the company by the all the red in the chart, as this is just data for the past 3 months since its listing. The company’s financials for the last 3 years speak otherwise.
Denta Water & Infra Solutions Ltd’s share is trading at a current PE of 14x which is lower than industry median of 34x. While it would be too soon to look at the 10-year media PE for the company, the industry median for the last decade is a modest 22x.
Another area where the company currently outdoes many is ROE (Return on Equity).
ROE tells you how good the company is at turning your investment into profit. A higher ROE means the company is doing a better job of using shareholders’ money effectively.
The current ROE of Denta Water & Infra Solutions Ltd is around 45% and the 3 year ROE is about 60%, which means that in the last 3 years, for every Rs 100 of shareholder money in the company, the company generated Rs 60 in profit that could potentially benefit the shareholders (through dividends or increased share value).
Hold or Let it Flow?
Sunil Singhania’s 1.3% stake in Denta Water & Infra Solutions Ltd has the investor WhatsApp groups bussing. With stellar ROCE, ROE, Zero Debt, big growth numbers for sales and profits, the company is showing all the possible signs of being the next multibagger.
With governments across the globe focussed on water sustainability, players like Denta Water & Infra Solutions Ltd could play a very vital role with their expertise in the field, backed the Indian government with its Jal Jeevan mission.
How this stock plays in the short and the long run will be an interesting trajectory to watch. One could decide to watch from the sidelines or may be as a part of the action. But that is one to decide with his investment advisor.
For now, adding the stock to the watchlist would be a good start.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Suhel Khan has been a passionate follower of the markets for over a decade. During this period, He was an integral part of a leading Equity Research organisation based in Mumbai as the Head of Sales & Marketing. Presently, he is spending most of his time dissecting the investments and strategies of the Super Investors of India.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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