SFC Environmental Technologies Ltd

SFC provides the process technology and key equipment for municipal sewage treatment plants, selling to the contractors that build them. The promoters have built SFC into the market leader in sequencing batch reactor (SBR) technology for sewage treatment in India, with over 80% share (Frost and Sullivan). The core leadership has been with SFC for over 15 years, and its largest external investor bought more shares this month above the IPO cap price, which gives us comfort. It earns EBITDA margins of 29% to 30%, well above water treatment peers, and has an order book of 2.1x FY26 revenue. Its end customers, however, depend on government funding, which shows in weak cash conversion, with receivables at 82.2% of FY26 revenue. We would track SFC for now.