The shares of the Water Management company, specializing in water and wastewater treatment solutions, jumped upto 5 percent upon receiving a Letter of Award from the Saudi Water Authority for the Mega Sea Water Desalination Plant project valued at approximately USD 272 million (Rs. 2,332 Crores).
With a market capitalization of 10,151.42 Crores on Thursday, the shares of VA Tech Wabag Ltd jumped upto 4.9 percent, making a high of Rs. 1670.50 compared to its previous close of Rs. 1592.35.
VA Tech Wabag Ltd., engaged in water and wastewater treatment solutions, offering services such as design, construction, and operation of treatment plants for both municipal and industrial sectors, has received a Letter of Award from the Saudi Water Authority, valued at approximately USD 272 million (approximately Rs. 2,332 Crores).
The order is to design, engineer, supply, construct, and commission a 300 Million Litres per Day (MLD) Sea Water Reverse Osmosis (SWRO) mega desalination plant at Yanbu, on Saudi Arabia’s west coast.
The project, to be executed on a greenfield site, is scheduled for completion within 30 months of contract signing. This order further cements WABAG’s global leadership and technical strength in large-scale desalination, aligns with Saudi Arabia’s Vision 2030 water sustainability goals, and marks a significant milestone in WABAG’s international growth trajectory.
Financials & Others
The company’s revenue rose by 23.9 percent from Rs. 942.4 crores to Rs. 1,167.6 crores in Q4FY24-25. Meanwhile, Net profit rose from Rs. 72.4 crores to Rs. 99.5 crores in the same period.
The company has a P/E ratio of 31.29, slightly below the industry average of 32.47, indicating it’s fairly valued. It maintains a low debt-to-equity ratio of 0.17, reflecting a strong capital structure. Additionally, the company has achieved an impressive average net profit growth of 23.77% over the past three years, showcasing healthy and consistent financial performance.
VA Tech Wabag is a leading water technology company that specialises in designing, building, and operating facilities for drinking water, sewage, industrial wastewater, and desalination, both in India and internationally.
They offer a range of services, including engineering, procurement, construction (EPC), and operation and maintenance (O&M) across municipal and industrial sectors. Their expertise spans various industries such as oil and gas, power, steel, fertilisers, and food and beverage.
The company’s key clients span various sectors, including municipal water and wastewater, with prominent organizations like the Saudi Water Authority, Singapore’s National Water Agency, and Delhi Jal Board.
In the oil and gas sector, they work with industry leaders like Reliance Industries, GAIL, and ONGC, and energy sector clients include Petronas and SIBUR, while in steel, they collaborate with companies like Dangote and CPCL.
It also supports sectors like food and beverages, fertilizers, and industrial parks, partnering with entities such as FISA, Marafiq, and CIDCO. Additionally, they work with major funding agencies like the World Bank and the Asian Development Bank.
Over the next 3-5 years, the company aims for 15-20% CAGR in revenues, with EBITDA margin around 13-15%. The order book is strong, 3x of revenue, and O&M is expected to contribute 20% of total revenues.
RoCE is targeted at above 20%, while RoE is projected at 15%. The asset-light business model and focus on efficient execution and new projects will drive consistent profitability, with a net cash-positive position ensuring long-term value for shareholders.
Written by Sridhar J
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