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Tech Boom Meets Water Crisis: Who Will Supply?
28 Aug
Summary
- Semiconductors and data centers are major water consumers.
- Global desalination market to reach $30 billion by 2031.
- Two Indian firms vie for critical industrial water solutions.
India's burgeoning high-tech industries, including semiconductors, data centers, and green hydrogen, are driving a substantial increase in ultrapure water demand. This escalating need has created a significant bottleneck, with specialized water technology companies emerging as key players. The global desalination market is expected to grow from $18 billion to $30 billion by 2031, highlighting the immense potential in water treatment and recycling.
Two prominent Indian companies, Va Tech Wabag and Ion Exchange, are strategically positioned to capitalize on this demand. Va Tech Wabag, a pure-play water technology firm, focuses on drinking water treatment, wastewater treatment, recycle-reuse, desalination, and industrial water treatment. Ion Exchange offers comprehensive water and environment management solutions, with a particular focus on specialized ultrapure water systems for the semiconductor industry.
Va Tech Wabag boasts a strong order backlog of ₹19,394.2 crore and aims for 15-20% revenue growth, supported by sovereign-backed projects and a strategic shift towards high-margin Operations & Maintenance (O&M) contracts. Ion Exchange, while possessing deep expertise in ultrapure water systems, is currently navigating challenges from legacy project cost overruns, which have impacted its profitability and valuation despite consistent revenue growth.
