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Which Stocks Will Benefit from Mission – Namami Ganga of NaMo ?

November 24, 2014

Clean River GangaThe River Ganga is considered amongst the holiest rivers in the country with thousands of pilgrims thronging its banks to take a dip. However, the river today holds the infamous distinction of being the fifth most polluted river in the world. The narendra Modi led government has promised to clean up the river and wants to complete the same over the next decade by spending Rs510bn on setting up sewerage plants in 118 towns and villages.

Sewerage treatment opportunity to Clean Ganga
Daily sewerage being generated by 50 cities along the river Ganga totals 2,723 MLD of which only 1,209 MLD is treated implying 44% treatment capacity. Inadequate sewage treatment capacities represent an opportunity of ~1500 MLD which translates to an opportunity size of ~Rs 75‐80bn. To create the necessary infrastructure an estimated investment of Rs 100‐120bn will be needed over next 8‐10 years.

Effluent treatment plants to Clean Ganga
To meet the government’s vision of having zero liquid discharge of effluents into the Ganga, a total of 501MLD of effluent treatment plants are needed with an investment of Rs25‐30bn for 765 gross polluting industries. Note that Uttar Pradesh alone accounts for 54% of the effluents discharged with key contributing industries being Sugar, Paper, Distillery and Tanneries.

The Stocks that will benefit from this mission of Prime Minister include VA Tech, Praj Industries, Thermax, L&T, KEC International, Voltas which are present in the manufacture of sewerage and/or effluent treatment plants. We recommend a LONG TERM BUY on Praj Industries which is into Water Treatment and Effluent treatment plant ‐ mainly industrial driven. If you hold any other stocks mentioned above, you can continue to HOLD the same.

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