Sunil Singhania Picks Stake in This Smallcap Company for the First Time. Is There Upside?

Investing successfully in stocks requires a combination of skills, knowledge, and disciplined habits.

Investors also need to have a clear investment plan with defined goals, risk tolerance, and exit strategies. This includes knowing when to buy, hold, or sell.

However, sometimes you can follow successful investors and benefit from their market-beating strategies refined over decades.

One such esteemed investor whose every investment garners attention is Sunil Singhania.

Who is Sunil Singhania?

Sunil Singhania is the founder of Abakkus Asset Manager, an investment management company.

He has a track record of over two decades in equity markets, and he played a significant role in building Reliance-Nippon MF into one of India's largest asset management companies (AMCs).

Which Stock Did Sunil Singhania Pick Stake and Why?

Sunil Singhania has taken a stake in smallcap stock Denta Water and Infra Solutions.

According to the latest shareholding pattern for March 2025, investor Sunil Singhania now holds a 1.27% stake in the company.

He held no stake in the company in December 2024 quarter, as the company went public in January 2025.

While the reasons for his purchase remain unclear, here a few a few points that can explain the decision.

Jal Jeevan Mission

The Union Budget 2025-26 has significantly emphasised the Jal Jeevan Mission, which aims to provide potable tap water connections to all rural households in India.

The total budget outlay for the Jal Jeevan Mission (JJM) in 2025-26 has been enhanced to Rs 67,000 billion, marking a 195% increase over the revised estimate for 2024-25.

Denta Water and Infra Solutions has been awarded and is executing several key projects under the Jal Jeevan Mission, primarily in Karnataka.

Notable projects include the Kerehalli Drinking Water Project and the Chikkabenakal Drinking Water Project. The enhanced outlay under the mission is likely to benefit the company.

Strong Quarterly Numbers

Denta Water and Infra Solutions posted a solid rise in revenue for the quarter ending 31 December 2024. Sales rose to Rs 513 million (m) from Rs 455 m reported in the corresponding period last year.

Net profits surged to Rs 149.6 m, up 125.6% YoY.

Lower overall costs combined with higher revenue improved profitability. The company benefited from cost optimisation and improved operational efficiencies.

What Next?

Denta Water's Jal Jeevan Mission projects in Karnataka - Kerehalli and Chikkabenakal - alongside other water management and lift irrigation projects, will benefit the company.

Denta Water's involvement in JJM projects is a significant part of its business, contributing to its order book and revenue growth.

The company's expertise in design, installation, commissioning, and operations of water infrastructure positions will benefit from the mission's extension until 2028, which aims to provide tap water connections to all rural households.

The company currently has around 22 ongoing projects, with a total contract value nearing Rs 9.8 bn, most of which are water management-related.

The increased revenue visibility in terms of the order book and the increased outlay under the JMM should facilitate growth of the company going forward.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

How the Share Price of Denta Water has Performed

In the past five days, excluding today's spike, the Denta Water stock is up 7.6%.

In the last one month, the share price is up 8.5%. The shares of the company were listed in late January 2025.

The stock touched its 52-week high of Rs 377.3 on 21 February 2025 and its 52-week low of Rs 255 on 7 April 2025.

About Denta Water

Denta Water executes precision water revitalisation projects, including groundwater recharge, water treatment, and lift irrigation, connecting and sustaining communities through innovative infrastructure.

Notable projects include the Byrapura & Hiremagaluru LIS Project, Karagada LIS Project, KC Valley wastewater treatment project in Bengaluru, and multiple Jal Jeevan Mission-related drinking water projects such as Kerehalli and Chikkabenakal.

For more details see the Denta Water fact sheet and quarterly results

Happy investing.

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