4 Water Infra Stocks to Watch for Long-Term Growth

#2 Ion Exchange (India) Ltd

The second stock in the list is Ion Exchange (India). It operates across water treatment, environmental solutions, industrial products, and speciality chemicals.

Its water-treatment activities include desalination, ultra-pure water systems, wastewater treatment, water recycling and reuse, zero-liquid-discharge systems, membranes, and standard treatment plants.

The company also manufactures and sells water-treatment chemicals, ion-exchange resins, pharmaceutical resins, and has a consumer-products business.

Thus, revenue comes from many sources: project execution, equipment and product sales, chemicals and resins, consumables, and lifecycle services such as O&M, retrofits, rentals, and monitoring.

The company changed its reporting structure in Q1 FY27 and now reports five offerings: Treatment Solutions, Industrial Products, Lifecycle Services, Speciality Chemicals, and Consumer Products.

Management indicated that products, chemicals, and services together should account for around 60% of the business, while treatment solutions should contribute around 40%. That makes Ion Exchange different from a company that earns most of its revenue only by constructing water projects.

Financial Performance

Financial Snapshot (FY22 to FY26)

If we look at the financials, revenue has increased every year from FY22 to FY26. But profitability did not keep pace. EBITDA margin declined from 16.2% in FY22 to 7.2% in FY26. Net profit margin also declined from 10.3% to 4.9%.

Also, in Q1FY26, consolidated operating income was Rs 7,005 m and EBITDA was Rs 318 m with a margin of 4.54%, and net profit was only Rs 31 m with a margin of 0.44%

The major pressure came from treatment solutions because this segment generated Rs 2,100 m of revenue but reported an EBIT loss of Rs 170 m because of legacy projects.

Management highlighted an order book of around Rs 24,730 m across treatment solutions, industrial products and lifecycle services as of 30 June 2026.

The company expects growth from the resumption of Gulf Cooperation Council (GCC) dispatches, membrane-capacity expansion, additional standard-plant capacity, overseas business, and the scaling of O&M, consumables, and retrofit services.

Speciality Chemicals revenue grew 21% in Q1 FY27. However, segment EBIT margin declined to 9.71%, with management pointing to geopolitical disruption and higher costs of the Roha facility.

#3 Enviro Infra Engineers Ltd

The third stock is Enviro Infra Engineers, which is primarily an environmental-infrastructure company focused on water and wastewater projects.

Its business includes the design, engineering, construction, and operation of sewage-treatment plants, sewerage systems, common effluent-treatment plants, and water-supply projects. The company earns EPC revenue during construction and O&M revenue once projects become operational.

It has also adopted the Hybrid Annuity Model (HAM). Under this model, construction is followed by long-term O&M, giving the company a long term revenue stream than a conventional EPC contract.

The company has also expanded into renewable-energy EPC and independent power producer activities covering solar, wind, and battery-energy-storage systems.

So while water and wastewater remain its core business, the company is gradually building a broader water and environmental-infrastructure platform.

Financial Performance

Financial Snapshot (FY22 to FY26)

If we look at the financials, revenue increased from Rs 2,235 m in FY22 to Rs 11,456 m in FY26.

At the same time, EBITDA margin remained above 22% in every year shown in the table, and net profit margin also stayed around the mid-teens.

In Q1FY27, consolidated revenue was Rs 3,592 m, where EBITDA stood at Rs 757 m and PAT at Rs 452 m. EBITDA margin was 21.1%, while PAT margin was 12.6%.

Revenue increased 49% YoY, supported by execution across the water and wastewater order book. The water and wastewater business contributed Rs 2,550 m, or 71% of consolidated revenue.

Management reiterated that water and wastewater remain the core business. The company focuses on wastewater-treatment plants, water-supply projects, and zero-liquid-discharge opportunities.

During Q1 FY27, it won two Namami Gange HAM projects in Varanasi: a 60 MLD project at Lohta and a 45 MLD project at DDU Nagar. The combined value was Rs 2,569 m, with each project including 18 months of construction and 15 years of O&M.

Management indicated an EBITDA margin of around 21-22% for the consolidated business. For the standalone water and wastewater business, management indicated an EBITDA margin of 19-20% and a PAT margin of 13-14%.

#4 Kalpataru Projects International Ltd

The fourth stock is Kalpataru Projects International, which is different from the other three companies because water is only one part of a much larger EPC business.

Kalpataru Projects International, or KPIL, is different from the other three companies because water is only one part of a much larger EPC business. Its major businesses are transmission and distribution, buildings and factories, water infrastructure, oil and gas pipelines, urban infrastructure, and railways.

The water division works on water-treatment and water-supply projects, including treatment plants, pipeline networks and related infrastructure. Water generated Rs 21,120 m of revenue in FY26, which was around 8% of KPIL's FY26 EPC business revenue of Rs 265,650 m.

So KPIL provides exposure to the water theme, but investors are also buying exposure to its much larger transmission, distribution and other infrastructure businesses.

Financial Performance

Financial Snapshot (FY22 to FY26)

If we look at the financials, KPIL's revenue increased from Rs 147,770 m in FY22 to Rs 271,431 m in FY26. The EBITDA margin, however, remained broadly stable around 8-9%. The more significant movement came in net profit, which increased to Rs 10,306 m in FY26.

KPIL reported consolidated revenue of Rs 64,080 m in Q1 FY27, EBITDA of Rs 5,619 m, and PAT of Rs 3,115 m, with an EBITDA margin of around 8.77%, while the PAT margin was 4.86%.

The water business generated Rs 6,260 m during the quarter, down 7% YoY from Rs 6,700 m. Management attributed the decline to slower execution because of lower collections under Jal Jeevan Mission projects. They said water execution was in line with its plan despite the weaker revenue.

The company also reported its first Middle East water-treatment project, worth Rs 3,440 m. Water-business collections were around Rs 6,500 m in 2027 up to July with the management expecting collection intensity to improve.

Conclusion

India's water-infrastructure spending is creating opportunities across treatment plants, drinking-water networks, wastewater management, water reuse, and long-term operations.

However, the sector also comes with risks such as high dependence on government orders, long project cycles, execution delays, and policy or geopolitical uncertainties.

So, investors should carefully understand their own risk appetite and investment objective before making any decision in this sector.

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