AWC’s India pivot

AWC group chief executive officer and president Datuk Ahmad Kabeer Mohamed Nagoor.

WHEN AWC Bhd acquired full ownership of Stream Group Sdn Bhd about two years ago, it doubled down on the specialised automated waste collection systems (AWCS) business, which has projects spanning Malaysia, Singapore and the Middle East.

Stream, a home-grown Malaysian company, also had prior experience in India, having undertaken the Noida Smart City AWCS project in Greater Noida between 2016 and 2019.

The company is now looking to build on that experience as India gains importance in its overseas expansion strategy.

In late September, Stream secured two contracts worth a combined RM13.1mil to provide AWCS connections for upcoming developments at Gujarat International Finance Tec-City (GIFT City) in Gandhinagar, Gujarat.

The contracts cover developments in GIFT City’s domestic tariff area and special economic zone.

Although relatively modest in value, the contracts are strategically significant, according to AWC group chief executive officer and president Datuk Ahmad Kabeer Mohamed Nagoor.

“GIFT City provides Stream with an entry point into one of India’s prominent planned financial and technology hubs.

“Successful delivery could strengthen our track record with local stakeholders and position us to pursue subsequent phases of development, as well as similar large-scale urban projects,” Ahmad Kabeer tells StarBiz 7.

“India’s urbanisation and growing emphasis on more efficient waste handling provide a supportive long-term backdrop, and we are already pursuing additional tenders in the market,” he says.

Both contracts run for 36 months, with Stream planning to novate the agreements to a newly established Indian entity as part of its efforts to build a local presence in the market.

Beyond installation work, Stream is also eyeing operations and maintenance contracts as more AWCS installations come on stream in India, which could provide a more recurring revenue stream.

“Our aim is to build a sustainable, long-term business in India rather than rely on isolated contract wins,” he says.

Ahmad Kabeer is AWC’s largest shareholder, with a direct stake of 8.59% and an indirect interest of 26.74%.

AWC’s shift in overseas priorities comes against a backdrop of moderating project activity and geopolitical uncertainty in the Middle East.

“Malaysia and Singapore continue to underpin our tender pipeline, supported by our established presence and estimated market shares of about 90% and 40%, respectively.

“Contract wins in these markets have helped offset the slower pace of project activity in the Middle East, while India presents an avenue for growth.”

As at June 30, 2026, Stream’s outstanding order book stood at RM248mil – accounting for about 28.5% of the AWC group’s outstanding order book.

Data centres offer another growth avenue

Beyond its environment division, which houses Stream, AWC is also tapping growth in Malaysia’s data centre (DC) sector through its engineering and facilities management divisions.

Ahmad Kabeer says the engineering division, through wholly-owned subsidiary Qudotech Sdn Bhd, secured four DC contracts worth a combined RM127.3mil over the past 12 months, including awards from returning customers.

“The engineering division generated RM107.7mil in revenue in the financial year 2026 (FY26) which was an increase of 24.8% year-on-year (y-o-y) and crossing the RM100mil mark for the first time.

“Similarly, the division’s profit before tax (PBT) rose 27.5% y-o-y to RM8.8mil after adjusting for the reversal of impairment of RM6.3mil versus a PBT of RM6.9mil in the previous financial year.”

Meanwhile, the facilities division made an entry into the DC space in FY26 after securing an integrated facilities management contract worth RM99.1mil.

At group level, AWC’s outstanding order book stood at RM900mil, equivalent to about twice its FY26 revenue.

Ahmad Kabeer says as the DC sector expands, demand for reliable water infrastructure presents opportunities for the group in areas such as cold-water and sanitary plumbing systems, water reticulation and rainwater harvesting.

In a Sept 29 report, M+ Global Research raised its target price for AWC to 80 sen from 65 sen, based on a higher price-to-earnings multiple of 12 times, from 10 times previously.

The research firm says the valuation re-rating reflects improving earnings visibility, underpinned by a record RM100mil engineering order book, largely driven by DC-related contract wins, together with the India AWCS contract, which validates the group’s regional expansion strategy and provides greater geographic diversification against ongoing Middle East project delays.

M+ Global also notes that improved trading activity since early September could help reduce the discount historically applied to AWC shares because of their relatively low liquidity.

JF Apex was slightly more positive, having upped its sum-of-the-parts target price to RM1.25 from RM1.22, citing the stock’s exposure to the DC sector through both the engineering and facilities divisions, the early progress in its India expansion and predictable cash flows from long-term concessions.

Shares of AWC have risen 39% or 20 sen year-to-date to 72 sen at the time of writing.

Recently, existing shareholder Mastrack Sdn Bhd increased its stake in AWC to 5.85%, crossing the 5% threshold to become a substantial shareholder after acquiring 4.91 million shares on Oct 22.

Mastrack is owned by Datuk Lee Kok Khee, the former group chief executive officer of Atlan Holdings Bhd.

Ahmad Kabeer says AWC welcomes the increased stake, viewing it as a “reflection of confidence in the group’s long-term prospects” as it pursues its next phase of growth.