Budget 2020 My Pick: Why purchasing Va Tech Wabag can be beneficial for investors, expert explains

Budget 2020 will be announced in a couple of weeks and investors are hunting for best possible stocks they can purchase before that to take as much advantage as possible. And Zee Business brings a a profitable deal for you!

Ahead of Budget 2020, there is a possibility of big announcements for Jal Jeewan Mission. The aim of this mission is to solve problems related to drinking water and sewage. In order to provide access to clean drinking water to every individual, around Rs 2.75 lakh crore are expected for allotment from government for this mission - expected to be spent within 5 years. The government is planning to allot Rs 45,000 crore for drinking water purposes this year alone. Keeping this in mind, investors should go for Va Tech Wabag stock!
Now, the question arises as to how purchasing Va Tech Wabag stock will benefit investors and what is its connection with Jal Jeewan Mission? Here’s the answer.

Va Tech Wabag is known for its water and sewage treatment business.

 Last year, This company has allotted Rs 235 Crore to start sewage treatment plant.

Earlier, they faced the problems related to working capital and order execution, Recently their order book has reached Rs 12,700 Crore. The revenue viability seems stronger too.

In FY19, their EPS was Rs 19 and PE, 11.8x.

In Union Budget 2020, the central government is focusing on Jal Jeewan Mission and therefore, purchasing Va Tech Wabag stock can be beneficial for investors going forward.

WHAT IF WE PURCHASE IT NOW AND SELL ON BUDGET DAY?

According to market expert Avinash, along with its advantages, we have seen disappointments as well, so we should wait for one or two quarters before doing that. Since Va Tech Wabag is a market leader in sewage and water treatment, we can expect a spurt ahead of Budget 2020. If government announces something related to the company, then their coming years are going to be happy ones.  However, investors should know that there are problems with working capital, Avinash informed.