Va Tech Wabag Ltd. share price target

VATW's momentum in delivering strong performance is expected to continue in the medium term driven by a strong order backlog and immense opportunities it has identified in the international markets, which will enable order inflows. We expect EBITDA...

VA Tech Wabag Limited (Va Tech) reported a strong performance during Q4FY2025 with sales growth of 23.8% y-o-y to Rs. 1,156 crore. This helped them meet the 15% revenue growth guidance for FY25.

We maintain our BUY rating on the stock.

VA Tech Wabag Limited reported a decent performance during Q3FY2025 with sales growth of 15.1% y-o-y to Rs. 811 crore. Domestic revenue increased 24% y-o-y to Rs. 496 crore while the international revenue was up 2% y-o-y to Rs. 308 crore.

We recommend a BUY on the stock with a near-term TP of Rs 1,860/Share, implying an upside of 10% from the CMP

We maintain our BUY rating on this stock.

Va Tech Wabag’s adjusted net profit increased 27.8% y-o-y to Rs. 70 crore. Revenue of Rs. 700 crore grew 5.3% y-o-y and OPM stood at 13.4%, up 42 bps y-o-y.

We visited Va Tech Wabag’s waste water treatment and desalination plants in Chennai and also
had an interaction with the management. Company has maintained its guidance of 15% revenue
growth and margins of 13-15% for the next 3-5 years.

VA Tech Wabag (Wabag) bagged a mammoth order of INR 27bn (equivalent to its FY24 revenue) from the Middle East for a desalination plant – the entire order is for EPC.

Surfing the strong water wave

? Va Tech Wabag’s adjusted profit decreased 10% y-o-y to Rs. 72 crore due to higher interest expenses. Revenue of Rs. 934 crore was up 0.8% y-o-y and OPM stood at 12.4%, up 40bps y-o-y.

VA Tech Wabag’s (Wabag) orderbook increased to INR 125bn as of Jun-23 on account of strong order inflow in the last 5 quarters. Of the total, EPC orders account for INR 65bn (2.6x book to bill ratio). Note that the O&M orderbook at INR 48bn provides strong revenue visibility.