Best Water Stocks in January 2026: Indian Hume Pipe Company, and More Based on ROCE and ROE

India’s water and waste management sector continues to attract attention in January 2026, supported by rising infrastructure spending, urban sanitation needs, and long-term water security initiatives. Companies operating in water supply, wastewater treatment, and waste management are being evaluated closely on financial efficiency and balance sheet strength. 

This article highlights select water sector stocks based on key metrics such as Return on Capital Employed (ROCE), Return on Equity (ROE), and debt levels, offering a data-led snapshot of the sector. 

Top Water Sector Stocks in January 2026 – ROCE Basis

Overview of the Best Water Stocks in January 2026

Indian Hume Pipe Company Ltd 

The company continues to report a high return on capital employed, reflecting efficient use of operating assets. In recent months, Indian Hume Pipe has been working on diversifying revenue streams alongside its core water supply and sanitation projects. This includes plans to monetise select land parcels in Pune and Mumbai, which could support liquidity and reduce dependence on project-based cash flows. 

Urban Enviro Waste Management Ltd 

Despite its smaller market capitalisation, the company reports relatively strong capital efficiency. Over the past year, Urban Enviro has expanded its municipal solid waste (MSW) project portfolio through new local body contracts. Its valuation multiples remain lower compared with several peers, which reflects both its micro-cap status and the risks associated with execution and scale.

Enviro Infra Engineers Ltd 

The company has indicated an order book target of around ₹2,500 crore for FY26, supported by continued bidding activity in wastewater treatment and infrastructure projects. Reported operating margins have remained stable, and the balance sheet position has been relatively conservative, allowing flexibility in project execution and working capital management.

Denta Water & Infra Solutions Ltd 

Denta Water focuses on groundwater recharge and recycled water projects, a niche segment within the broader water infrastructure space. As of mid-2025, the company was executing multiple projects across states, providing revenue visibility over the medium term. Historical return ratios indicate steady profitability, though execution timelines and project approvals remain key variables.

Va Tech Wabag Ltd 

The company operates across domestic and international water treatment markets and continues to maintain a sizeable order book. Recent contract wins, including repeat overseas orders, have added to revenue visibility. Wabag has also reported a net cash position over several quarters, supporting balance sheet stability amid ongoing project execution.

Felix Industries Ltd 

Felix operates in the e-waste recycling segment, which has seen increased regulatory and industry focus. The company has expanded processing capacity and reported strong growth in quarterly profitability in FY26. Its business remains sensitive to commodity prices, technology adoption, and scaling of operations.

Top Water Sector Stocks in January 2026 – RoE Basis

Top Water Sector Stocks in January 2026 – Debt-to-Equity Ratio Basis

Conclusion

Water and waste management companies remain structurally linked to India’s infrastructure and sustainability priorities. Stocks with higher ROCE and ROE indicate better capital efficiency, while lower debt levels provide financial flexibility during execution-heavy project cycles. 

Investors tracking water sector stocks in January 2026 may benefit from comparing valuation, profitability, and balance sheet metrics together rather than relying on a single indicator.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.