Severn Trent PLC (LSE: SVT)

Severn Trent PLC (LSE: SVT), a FTSE 100 listed company and United Kingdom-based holding company of Severn Trent Water Limited (STWL) and the ultimate holding company of Severn Trent Utilities Finance Plc (STUF). The Company provides water and wastewater services. The Company operates through two divisions: Regulated Water and Wastewater, and Severn Trent Business Services. Regulated Water and Wastewater division includes the wholesale water and wastewater activities of the Company’s regulated businesses, STWL and Hafren Dyfrdwy and its retail services to domestic customers. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock. 

Key Investment Rationale – Buy at GBX 2,601.00

• Significant Increase in Capital Investment: Severn Trent delivered its highest-ever capital investment of £1.7 billion in FY25—marking a 40% increase year-on-year. This demonstrates a clear commitment to strengthening infrastructure and enhancing long-term service delivery, while aligning investment levels with future regulatory expectations.

• Consistent Operational Outperformance: The company met or surpassed 83% of its performance commitments this year, including its best results to date in critical areas like leakage reduction, supply reliability, and internal sewer flooding. This track record suggests a well-established operational approach and an ability to respond effectively to customer and environmental needs.

• Environmental Leadership Maintained: Severn Trent is on course to secure a sixth consecutive year of top-tier environmental performance, underlining the impact of sustained investment and proactive management of storm overflow interventions. Early data shows a 66% year-on-year reduction in spill events, highlighting progress in this priority area.

• Healthy Financial Position Supports Future Plans: With 41% growth in adjusted earnings per share and robust balance sheet management at the end of FY25, the company appears well positioned to deliver on its stated ambition of doubling adjusted EPS by 2028. Its regulated asset base has also grown by 46% over the past five years, creating a decent foundation for the AMP8 investment cycle.

SVT Daily Chart & Valuation

For conducting the valuation, the following peers have been considered: Telecom Plus PLC (LSE: TEP), National Grid PLC (LSE: NG.), and others.

As per the above-mentioned price action, a ‘Buy’ rating has been given on Severn Trent PLC (LSE: SVT) at the current Market Price of GBX 2,601.00, as of August 11, 2025, at 10:49 AM GMT+1.

Markets are trading in a highly volatile zone currently due to certain Macro & Micro-economic data and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 11 August 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.