Keynote Projects 90% Upside in Water Treatment Stock Trading at 50% Discount from Peak

Last Updated on February 23, 2026 by Rajat Bhati

Keynote Capital has reiterated its BUY rating on Enviro Infra Engineers (EIEL), citing strong growth in India’s water and wastewater management sector, and set a robust target price of INR 309. This represents a significant 89.5% upside from the current market price of INR 163.

Enviro Infra Q3 FY26 results were “mixed,” but the Keynote coverage on Enviro Infra focuses on the company’s long-term execution efficiency and growing government bid pipeline.

Enviro Infra Target Price: Margin Prowess vs. Revenue Stagnation

The latest quarterly update from EIEL is a study in operational contrasts. On one hand, the company demonstrated exceptional profitability. EBITDA margins expanded by a staggering 530 basis points year-over-year, while Net Profit (PAT) grew by 15% to INR 42.1 crore.

However, the top-line told a different story. Revenue growth remained nearly flat at just 1% YoY (INR 250.0 crore). The culprit? Exogenous government delays. Unexpected postponements in tender evaluations and re-tendering processes in Delhi, Bihar, and Rajasthan created a temporary bottleneck in the order book’s conversion to revenue.

“The slowdown in order book accretion was caused exclusively by exogenous delays in government tender processes,” noted Manish Choraghe, Research Analyst at Keynote Capitals. “Importantly, management attributed the slowdown to administrative evaluation timelines, not to losing projects to competitors.”

Highlights of Keynote Coverage on Enviro Infra

Despite the execution lag, EIEL’s fundamental “engine” continues to hum. The total order book stands at a robust INR 3,092.5 crore.

Key Highlights of the Business Progression:

• AMRUT Opportunity: Management is eyeing a massive INR 26,000 crore bid pipeline under the AMRUT mission, where Detailed Project Reports (DPRs) are already approved.
• Diversification: EIEL is successfully pivoting toward sustainability. Its new Renewable Energy segment has already secured an order book of INR 256.0 crore, focusing on wind and Battery Energy Storage Systems (BESS).
• Water Reuse: A new revenue model is emerging where treated water from STPs (Sewage Treatment Plants) is supplied to industrial clusters and thermal power plants—a move that could command higher margins.

Financial Outlook: Scaling the Peak

Keynote coverage on Enviro Infra has maintained its conservative estimates, projecting a 25% Revenue CAGR over FY25–28E. While the management moderated its FY26 revenue guidance to INR 1,350 crore, they remains confident in hitting their PAT target of INR 230–250 crore, driven by a superior project mix and operational efficiencies.

Enviro Infra Post IPO Performance

Enviro Infra launched its IPO in November 2024. The issue received overwhelming demand, with the issue being subscribed 89.9x on the final day. Listing performance was as good as the subscription, with the issue listing with a 39.9% gain. EEIL gained momentum after listing and reached an all-time high of INR 325 per share, a return of ~120% from the issue price of INR 148. Currently, it is trading at INR 164, a correction of almost 50% from its all-time high.

Final Words

The core of the “Bull Case” for EIEL lies in its valuation. Trading at roughly 11.7x FY27E EPS, Enviro Infra share price appears undervalued relative to its growth trajectory in a sector characterized by high entry barriers and specialized technical know-how.

Management’s decision to prioritize margin discipline over volume-led growth (evidenced by moderating their bid win-rate expectations to 20-25%) suggests a focus on quality of earnings.

While the market may react to the near-term revenue “speed bump,” the combination of a healthy order book, a shift toward high-margin renewable EPC, and the government’s unwavering focus on water infrastructure (AMRUT and Namami Gange) makes EIEL a compelling growth story for 2026 and beyond.