India's Water Infrastructure Sector Shows Strong Growth Momentum
The water infrastructure sector in India is experiencing significant bullish momentum, with several companies demonstrating impressive growth trajectories in recent months. This surge comes amid rapid industrialization and strong government support through initiatives like the Jal Jeevan Mission and AMRUT 2.0, which aim to achieve universal water supply coverage and improved water quality across the nation.
Three Promising Water Infrastructure Stocks
Using Equitymaster's screening tools, we've identified three water infrastructure companies from the small-cap and mid-cap space that show strong financial performance and growth potential. These companies were selected based on their three-year compound annual growth rate in both net sales and net profit, with a focus on businesses primarily dedicated to water infrastructure rather than diversified operations.
Felix Industries Ltd: Leading with Impressive Growth Metrics
Felix Industries Ltd, listed on the SME segment of the National Stock Exchange, has reported remarkable financial performance with a 44.7% three-year CAGR in sales and an outstanding 122% three-year CAGR in net profits. The company has established a strong presence in both water and wastewater management solutions along with solid waste management services.
With manufacturing facilities operating in both India and Oman, Felix Industries has completed over 100 projects and processed substantial amounts of waste and wastewater. The company is now expanding its expertise into green hydrogen production, utilizing renewable energy sources for water electrolysis to create sustainable, emission-free energy solutions.
Their Oman facility has commenced full-scale production, focusing on hydrocarbon recycling, wastewater treatment, and chemical waste incineration. Looking forward, Felix Industries is expanding into waste-to-energy and advanced material recovery while leveraging AI and digital automation for smarter plant operations. The management anticipates closing the current year with revenues between ₹110 crore to ₹130 crore.
Enviro Infra Engineers Ltd: Strong Post-IPO Performance
Enviro Infra Engineers Ltd specializes in comprehensive water and wastewater management solutions across India, serving both municipal and industrial sectors. The company offers turnkey projects including sewage treatment plants, water treatment facilities, water supply systems, and common effluent treatment plants.
The company launched its IPO in November 2024, which was oversubscribed 91 times, demonstrating strong market confidence. Financially, Enviro Infra Engineers has reported a 75.6% three-year CAGR in sales and a 72.4% three-year CAGR in net profits.
Their strategic focus includes deepening presence in high-potential states, expanding their EPC and O&M portfolio, and investing in digital and green technologies to make wastewater infrastructure smarter and more sustainable.
Concord Enviro Systems Ltd: International Expansion Underway
Concord Enviro Systems Ltd brings decades of domain expertise in the water and wastewater treatment space. The company's integrated technologies help clients minimize freshwater intake, reclaim wastewater, lower energy intensity, and convert organic waste into clean fuel.
The company has reported a 21.8% three-year CAGR in sales and a 52.3% three-year CAGR in net profits. Their solutions encompass zero liquid discharge, anaerobic digestion, biogas generation, and carbon capture, designed to drive circular, energy-optimized operations that align industrial growth with environmental responsibility.
Concord Enviro Systems is currently setting up a new assembly unit in Sharjah to manufacture membrane modules, WHE modules, and containerized plants, enhancing their delivery capabilities for international markets. The company is strengthening its presence in existing geographies while entering new international markets with systems, plants, and third-party O&M services.
As of March 31, 2025, the company maintained a healthy order book of ₹532.7 crore, providing strong visibility for the next financial year. They're focusing on high-growth sectors like industrial wastewater reuse and zero liquid discharge opportunities in solar, chemicals, and biofuels sectors.
Investment Outlook for Water Infrastructure Stocks
Water infrastructure stocks in India present a promising investment opportunity driven by supportive government policies, growing market demand from demographic changes, and evolving technological landscapes in water management. However, investors should carefully evaluate companies based on proven execution records and structural strengths to effectively navigate sector-specific challenges.
The combination of government initiatives, increasing environmental compliance requirements, and sustainability mandates creates a favorable environment for companies specializing in water infrastructure solutions. As India continues its industrialization journey while addressing water scarcity concerns, the demand for efficient water management solutions is expected to maintain its upward trajectory.
