This Water Management stock which deals in the business of designing, supplying, installing, constructing, and managing operations related to drinking water, industrial water treatment, wastewater treatment, and desalination plants, in focus after the company plans to grow Revenue upto 20 percent by FY26 & triple its order book.
Share Price Movement
In Monday’s trading session, Va Tech Wabag‘s share price was down by 1.18 percent and was trading at Rs. 1,369.95 from the previous close of Rs. 1,386.35 per share. In the past year, the stock has given around 91 percent returns and outperformed the Nifty Index.
Future Plans
The Management targets to triple its order book relative to its revenue in the medium term. They aim for 15 to 20 percent CAGR in revenue, an EBITDA margin of 13 to 15 percent, RoCE above 20 percent, and RoE exceeding 15 percent. They plan for Operations & Maintenance (O&M) to contribute around 20 percent of total revenue and expect 15 to 20 percent revenue growth by FY26.
A strong order book ensures revenue visibility over the period, while the Indian companies might benefit from initiatives like Namami Gange 2.0 which is under the Jal Shakti Ministry. The company remains committed to an asset-light model, net cash positivity, and strong investor returns. They acknowledge the risks involved in project execution and potential margin fluctuations but remain confident in their strategy.
Financials
In its latest filing for the quarter ending December 2024, the company reported a 15.19 percent rise in revenue, reaching Rs.811 crore compared to Rs.704 crore in Q3FY24. During the same period, net profit increased by 11.11 percent to Rs.70 crore in Q3FY25, compared to Rs.63 crore in Q3FY24.
The EBITDA margins saw a 100 bps fall to 13 percent and Net profit saw a 20 bps fall to 8.7 percent in Q3FY25
Order Book & its guidance
The total order book as of December 2024 is around Rs. ~14,263.4 crore with 58 percent of EPC projects and the remaining 42 percent from O&M projects. 84 percent of the projects are from Municipals and 16 percent from Industrial.
They procured 60 percent of orders from India and the remaining 40 percent from the Rest of the World. Va Tech expects to gain orders worth around Rs. 1,000 crore in Q4FY25.
Company Profile
VA Tech Wabag is a water management company specializing in water treatment and desalination solutions. The company was founded in 1995 and offers comprehensive services for municipal and industrial clients globally.
Written by – Santhosh S
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