Companhia de Saneamento Básico do Estado de São Paulo – SABESP

What it is

Sabesp serves over 375 municipalities in São Paulo state, supplying treated water to roughly 28 million people and sewage services to over 25 million. Its business covers every stage of the water cycle — from capturing and treating raw water, to distributing it, then collecting and treating the wastewater.

It is the largest sanitation company in the Southern Hemisphere. In 2024 it signed a fresh concession agreement covering 371 municipalities, running until 2060.

Who owns it

Privatisation was completed in July 2024 by São Paulo governor Tarcísio de Freitas; the state cut its holding from 50.3% to 18.3%, while Brazilian energy group Equatorial Energia acquired 15% and became the new reference shareholder. The R$14.5 bn (US$2.8 bn) ($2.7 bn) share offering was the largest water-and-sanitation placement anywhere in the world.

The remaining roughly 67% sits with institutional and public investors — about 40% traded on B3 and a further 9.7% on the NYSE. Equatorial is locked in as reference shareholder until 2029.

Who runs it

Carlos Augusto Leone Piani was unanimously elected CEO by the board on 24 September 2024 and took office on 1 October 2024. He previously led Equatorial Energia as chairman and also served as CEO of PDG Realty and co-founded HPX Corp.

Daniel Szlak serves as CFO and Investor Relations Officer. The chair of the board is Ms.

Cecília Bertocco, in the role since 2023.

The money, in plain words

Revenue rose 41% in 2024 — from R$25.6 bn (US$5.0 bn) to R$36.1 bn (US$7.0 bn) — then a further 5.4% in 2025 to R$38.1 bn (US$7.4 bn) (our calculation). The big 2024 jump combined a new tariff structure with an accounting change that recognised assets differently; the 2025 step reflects steadier, operational growth.

Sabesp keeps about 22 cents of profit from every real of sales — a net margin of 22.0%, high for a regulated water utility. For every real shareholders have invested, the company earns back roughly 21 cents a year — a return on equity of 21.2%, strong for the sector.

The shares trade at 10.6 times annual earnings (a price-to-earnings ratio of 10.6×) and pay a dividend yield of 2.4% — modest income, but the growth story is the point. The company carries net debt of R$35.3 bn (US$6.9 bn) ($6.86 bn, our calculation: cash of R$4.7 bn (US$912 mn) against borrowings of R$40.0 bn (US$7.8 bn)), a meaningful load that is the price of a R$70 bn (US$13.6 bn) investment programme through 2029.

What it is doing now

In January 2026, Sabesp closed its acquisition of a 74.9% voting stake in EMAE (Empresa Metropolitana de Águas e Energia), a São Paulo hydroelectric company, paying R$682.6 mn (US$132 mn) in cash for the controlling block. The rationale is twofold: EMAE controls the Guarapiranga and Billings reservoirs that feed greater São Paulo, and it owns long-contracted hydroelectric generation assets that produce stable cash flow.

Capital spending reached a record R$15.2 bn (US$2.9 bn) in 2025, with a revised target of around R$20 bn (US$3.9 bn) for 2026. The first 18 months after privatisation brought material cost cuts and water- and sewage-connection targets met ahead of schedule.

What to watch

• Universalisation targets. Management has committed to investing R$70 bn (US$13.6 bn) by 2029 to achieve universal water and sanitation access. Progress on those targets each quarter drives both the regulatory tariff and investor confidence.
• Debt headroom. Covenants require net debt to stay at or below 3.5× operating cash flow at each quarter-end. With the EMAE deal adding to the balance sheet and capex at record levels, that ratio deserves close watching.
• Expansion appetite. Management has flagged interest in other large Brazilian water assets, including Copasa (Minas Gerais) and AySA (Argentina), and sees the UniversalizaSP programme as the most immediate consolidation prize inside São Paulo.
• Equatorial’s lock-up expiry. The reference shareholder’s commitment runs to 2029; any signal about renewal or exit would shift the ownership story materially.

This is news, not investment advice.