Sunil Singhania stock jumps 18% after announcing 159% revenue guidance for FY28

Synopsis: Denta Water & Infra Solutions Limited’s turnaround, marked by 186% revenue growth, rising profitability, a 25% ROCE, ₹720 crore order book, and strong management revenue guidance of 159% for FY28, has attracted Sunil Singhania’s 1.3% investment, boosting investor confidence.

This Micro-cap Water Management stock, engaged in groundwater recharging, irrigation systems, water management projects, and infrastructure development across railways and highways in India, jumped 18 percent after the company announced revenue guidance of 159 percent for the financial year 2028 and explained the financial turnaround story of Denta Water & Infra Solutions Limited.

With a market capitalization of Rs. 978.56 crores, the share of Denta Water & Infra Solutions Limited has reached an intraday high of Rs. 369.50 per equity share, rising nearly 17.64 percent from its previous day’s close price of Rs. 314.10. Since then, the stock has retreated and is currently trading at Rs. 339.10 per equity share. 

Reason Behind the Surge:

Denta Water and Infra Solutions Limited has emerged as a notable turnaround story in India’s water management and infrastructure sector, drawing the attention of ace investor Sunil Singhania, founder of Abakkus Funds. 

Sunil Singhania, known for his disciplined investment approach focused on fundamentally strong midcap and smallcap companies, Singhania’s decision to invest in Denta Water highlights growing confidence in the company’s transformation and future potential.

As per filings for the quarter ended March 2025, Abakkus Diversified Alpha Fund–2 acquired a 1.3 percent stake in the company, valued at around Rs. 12.2 crore. Over the past year, Denta Water was among only two new stocks added to his portfolio, underlining the strength of its turnaround. Here are the reasons:

Strong Financial Performance 

Denta Water and Infra Solutions Limited has delivered a sharp financial turnaround over the last five years. The company’s revenue grew from Rs. 1 crore in FY20 to Rs. 203 crore in FY25, reflecting a compounded growth rate of 186 percent over the last five years. In the first half of FY26 alone, Denta Water reported revenues of Rs. 141 crore, indicating strong business momentum. 

Profitability has seen an even sharper improvement. From reporting no EBITDA in FY20, Denta Water generated EBITDA of Rs. 72 crore in FY25, reflecting compound growth of over 450 percent. In H1 FY26, EBITDA stood at Rs. 51 crore, showing continued operating leverage.

Net profits followed a similar trajectory, rising from zero in FY20 to Rs. 53 crore in FY25, with Rs. 37 crore already recorded in the first half of FY26. This turnaround underscores management’s execution capability and the scalability of its business model.

Strong Profitability Metrics:

Denta Water’s improving profitability is also reflected in its return ratios. The company currently reports a Return on Capital Employed (ROCE) of around 25 percent, among the highest in its peer group. This indicates efficient capital utilization and improved project economics. Strong cash generation, better cost control, and timely execution of projects have contributed to margin expansion. 

Valuation and Order Book:

Denta Water listed on the stock exchanges in January 2025 at around Rs. 340 per share. As of early December 2025, the stock was trading near Rs. 360, after touching an all-time high of Rs. 480 in October 2025. Despite strong growth, the stock trades at a price-to-earnings multiple of about 15x, which is lower than the industry median of 18x and well below the long-term industry average of around 20x.

According to the company’s November 2025 investor presentation, Denta Water’s order book stands at approximately Rs. 720 crore. Management has also guided for additional order inflows of Rs. 800-1,000 crore by the end of Q3 or Q4 of the current financial year. 

Management Guidance: 

Denta Water & Infra Solutions Limited has laid out an ambitious growth roadmap, targeting revenues of over Rs. 300 crore in FY26, implying a growth of around 47.78 percent over FY25. It further expects revenues of Rs. 375-400 crore in FY27, translating into a growth of about 97.04 percent compared to FY25. 

By FY28, revenues are projected at Rs. 500-525 crore, representing a strong growth of nearly 158.62 percent over FY25 levels. Supported by strong execution, reasonable valuations, and long-term sector tailwinds, Denta Water’s turnaround story appears well-positioned for sustained and scalable growth.

Company Overview:

Denta Water & Infra Solutions Limited was incorporated in 2016 and is an integrated water and infrastructure solutions company specialising in groundwater recharging, irrigation systems, water management projects, and infrastructure development across railways and highways.

The company is engaged in designing, installing, and commissioning water management infrastructure, with expertise in groundwater recharging using recycled water, plus railway and highway construction.

Recent Quarter Results:

Coming into financial highlights, Denta Water & Infra Solutions Limited’s revenue has increased from Rs. 48 crore in Q2 FY25 to Rs. 74 crore in Q2 FY26, which has grown by 54.17 percent. The net profit has also grown by 72.73 percent from Rs. 11 crore in Q2 FY25 to Rs. 19 crore in Q2 FY26.

Denta Water & Infra Solutions Limited’s revenue and net profit have grown at a CAGR of 62.66 percent and 51.73 percent, respectively, over the last four years. In terms of return ratios, the company’s ROCE and ROE stand at 25.2 percent and 18.4 percent, respectively. Denta Water & Infra Solutions Limited has an earnings per share (EPS) of Rs. 27, and its debt-to-equity ratio is 0.03x.

Written By – Nikhil Naik

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