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Xylem Wins Contract in India

Zacks Equity Research

Water solutions provider, Xylem Inc. (XYL), has been successfully implementing its strategy for international expansion. The company has recently strengthened its presence in India with a new contract awarded by privately-held Essar Projects (India) Limited. Per the contract, Xylem will install the Sanitaire ICEAS biological treatment system at a new wastewater treatment plant in Jamnagar, Gujarat. The contract value remained undisclosed.

The wastewater plant, with a capacity of 70 million liters per day, will treat all the municipal wastewater in Jamnagar. Xylem will be responsible for the installation as well as ongoing services and maintenance of the plant. The treated wastewater will be used for non-potable industrial purposes, thereby reducing the region’s dependence on the Narmada River.

Earlier this month, Xylem won an equipment and service contract from the Singapore Land Transport Authority worth $6.5 million (S$8.2 million). In September, Xylem received the largest ozone contract in China. The contract entails the company to supply an ozone generation and introduction system, which will provide a safe municipal water supply in Jinshan, Shanghai. The contract is worth roughly $1.87 million (RMB 11.48 million).

With such high-value international contract wins, we expect the company to secure better results in the coming quarters. Xylem is expected to release the third-quarter 2013 results on Oct 29. The Zacks Consensus Estimate for the company stands at 36 cents, reflecting a year-over-year decline of 18.7%. The company has a current market capitalization of $5.2 billion.

Xylem currently carries a Zacks Rank #4 (Sell). Other stocks worth a watch in the industry include Manitex International, Inc. (MNTX), Dover Corporation (DOV) and Colfax Corporation (CFX). While Manitex International carries a Zacks Rank #1 (Strong Buy), Colfax and Dover Corp. carry a Zacks Rank #2 (Buy).

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