· AWC has secured two contracts worth a combined RM13.1m (INR30.85 crore) from Gujarat International Finance Tec-City Company Limited for automated waste collection system (AWCS) connections in GIFT City, India.
· We view the award positively, as this is STREAM's first India contract, arriving three weeks after our last note flagging India as the Environment division's key growth market. The contract awarded is estimated to lift AWC's outstanding order book to c.RM860.5m, equivalent to 1.9x FY26 revenue.
· Assuming a c.14% PAT margin, the contracts are estimated to generate c.RM1.8m in PAT over 36 months. The annual run-rate of c.RM0.6m is equivalent to c.2% of our FY27F core net profit of RM29.4m.
· Maintain our BUY recommendation with an unchanged sum-of-the-parts TP of RM1.22.
Secures RM13.1m AWCS Contracts in India. AWC, via its indirect wholly-owned subsidiary Stream Industries Sdn Bhd (STREAM), has signed two agreements with Gujarat International Finance Tec-City Company Limited to connect upcoming developments in GIFT City, Gandhinagar, to an AWCS network. The Domestic Tariff Area contract is worth INR19.82 crore (c.RM8.4m, inclusive of GST), while the Special Economic Zone contract is worth INR11.03 crore (c.RM4.7m, zero-rated for GST). Both contracts run for 36 months from the notice to commence. STREAM intends to novate both agreements to a newly incorporated Indian entity once established. The size is small, but that is not the point.
Our Take. We view the award positively, as it is the first hard evidence that the India pivot highlighted in our AWC Reborn note is starting to deliver. While the RM13.1m contract is small, the reference site matters more: GIFT City is a flagship smart-city development in Gujarat, giving AWC a foothold from which a successful AWCS installation could support follow-on phases and other smart-city opportunities in India. We see this as an important first step in building AWC’s India track record.
More importantly, the award provides tangible evidence of management executing on its stated strategy. The India story is no longer just a plan on a slide; it now has a signed contract, a marquee counterparty and a potential path to follow-on wins. Assuming a c.14% PAT margin, we estimate c.RM1.8m PAT over 36 months, or c.RM0.6m p.a. (c.2% of our FY27F CNP of RM29.4m). Including this win and the RM23.1m data centre contract secured in Aug-2026, AWC’s order book rises to c.RM860.5m (1.9x FY26 revenue).
Outlook. Environment remains the Group's key swing factor. Malaysia and Singapore should stay steady, while the Middle East remains soft amid ongoing geopolitical disruption. This win represents c.29% of our RM45m India contract assumption for FY27F. Elsewhere, the Engineering division's record c.RM100m data centre order book and Facilities' RM99.1m TM Technology Services IFM contract also continue to anchor near-term earnings visibility.
Earnings Revision. We make no changes to our earnings forecasts, as the contracts fall within our FY27F India contract assumption of RM45m.
Valuation. We maintain our BUY recommendation with an unchanged sum-of-the-parts TP of RM1.22 (fully diluted), alongside a three-star ESG rating. We value Engineering at 15x, Environment at 13x, and Facilities and Rail at 7x each, all on FY28F earnings. We like AWC for its (i) two independent entry points into the data centre theme via Engineering and Facilities, (ii) early traction on the India smart-city pivot, (iii) predictable cash flows from long-term concessions, and (iv) a net cash balance sheet in every year since its 2003 listing.
Risks. Delays in novating the contracts to the new Indian entity; slower-than-expected follow-on India wins; INR exchange rate fluctuations; regulatory compliance risks in a new jurisdiction.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.066846 | 4.098389 |
| EUR | 4.642019 | 4.645551 |
| CNY | 0.607873 | 0.608337 |
| HKD | 0.518664 | 0.522176 |
| SGD | 3.182150 | 3.203807 |