VA Tech Wabag Ltd Offers end-to-end solutions, including drinking water treatment, industrial and municipal wastewater treatment, water reclamation, desalination, and sludge treatment. It operates in engineering, procurement, and construction (EPC) and build-own-operate-transfer (BOOT) models.
Geographical Presence:
VA Tech Wabag Ltd Operates in over 25 countries, with a strong presence in India and international markets (57% of new orders from overseas between April and September 2024).
Clients:
VA Tech Wabag Ltd Serves municipalities and industries such as oil and gas, power, steel, fertilizers, food and beverage, and industrial parks.
Project Scale:
VA Tech Wabag Ltd has executed over 6,500 municipal and industrial projects, benefiting over 88 million people as of FY24.
Key Peer:
Ion Exchange (India) Ltd. is a primary competitor in the water treatment sector.
Financial Performance
Recent Financials (Q3 FY24, ending December 2024)
Historical Performance (FY19–FY23)
Return Metrics:
Return on Capital Employed (ROCE):
Declined to 5.1% in FY23 from 15.7% in FY22.
Return on Assets (ROA):
Dropped to 1.9% in FY23 from 5.5% in FY22.
Valuation Ratios (as of April 2, 2025)
Price-to-Earnings (P/E): 32.33 times, a 36% premium to the peer median of 23.84.
Price-to-Book (P/B): 4.25 times, a 50% premium to the peer median of 2.83.
Price-to-Sales: 1.1 times in FY23.
Dividend and Bonus:-
Dividend Yield: 0.0% as of April 16, 2025. The last dividend was ₹4.0 per share, paid on August 1, 2018.
Bonus Issue: Last bonus issued on March 26, 2015, at a 1:1 ratio.
Stock Price Performance:-
Current Price (as of April 27, 2025): Approximately ₹1,542.15 (NSE).
Recent Trends:
On April 8, 2025, the stock price was ₹1,342.9, and it has since risen to an average of ₹1,453.00, indicating an upward trend.
As of April 2, 2025, the stock was trading at ₹1,400.75 (NSE) and ₹1,402.30 (BSE).
The stock gained 0.55% from its previous close of ₹1,442.00 to ₹1,449.80 in early April 2025.
Historical Returns:
– 1-Year Return: Up 45.6% (market cap increased significantly).
– 3-Year Return: 69.95%.
– Since FY23: Share price rose from ₹513.7 to ₹1,348.9, a gain of 101.4%.
Volatility:
Weekly volatility has been stable at 7% over the past year, lower than the broader Indian market.
52-Week Range
High: Not explicitly stated in the data, but recent highs reached around ₹1,542.15.
Low Around ₹513.7 in FY23.
—
Market Position and Order Book
Order Book: As of September 2024, the order book stood at ₹14,600 crore, with 57% of new orders from international markets. A significant ₹2,700 crore desalination order from Saudi Arabia was cancelled in December 2024, leading to a 16% stock price drop, though it recovered partially.
New Orders:
of VA Tech Wabag Ltd
Growth Outlook:
Chairman Rajiv Mittal projected the order book to exceed ₹16,000 crore by March 2025 (prior to the Saudi order cancellation).
Market Cap Rank: Ranks 24th in the engineering sector with a market cap of ₹8,967.86 crore.
Technical Analysis
Current Signal: Daily buy/sell signal based on moving averages and technical indicators is **Sell** (as of April 27, 2025).
**Previous Signal**: Was **Strong Buy** in early April 2025, indicating a potential shift in momentum.
**Support and Resistance**:
Support and resistance levels for the day and week are calculated based on the previous trading ranges but are not explicitly provided in the data.
**Trend**: The stock was in a bullish trend in early April 2025, with a “Very Bullish” rating on Moneycontrol.
—
Analyst Recommendations
**Consensus**: Strong Buy recommendation from analysts.
Two analysts set a median 12-month target price of ₹2,064.
Average target price from 14 research reports (6 sources) is ₹1,808.
ICICI Securities maintained a “Buy” rating with a target of ₹1,980 (previously ₹1,540).
Sharekhan recommended “Buy” with a target of ₹1,650 in February 2025.
Rationale:
– Robust order book and international expansion support growth.
– Consistent profit increases in recent quarters (e.g., Q3 2023).
– Backing from notable investors like Rekha Jhunjhunwala adds confidence.
Shareholding Pattern (as of March 2025)**
as of March 2025 (based on the latest available data up to December 2024, with specific updates for March 2025 where applicable)
| Category | Shareholding (%) | Change from Previous Quarter | Notes |
| Promoters | 19.12% | No change (0.00%) | Includes Rajiv Mittal and Varadarajan S.; no promoter pledges reported. |
| Foreign Institutional Investors (FII) | 18.86% | +4.18% (from 14.68% in Sep 2024) | Increased significantly over the year from 12.45% in March 2024. |
| Domestic Institutional Investors (DII) | 1.76% | -1.51% (from 3.27% in Sep 2024) | Includes Mutual Funds (1.47% as of Dec 2024); down from 5.63% in March 2024. |
| Retail & Other Investors (Public) | 60.25% | -2.54% (from 62.79% in Mar 2024) | Alternative data suggests 59.99% as of Dec 2024; majority holding. |
| Notable Investor | 8.04% | No change reported | Rekha Jhunjhunwala’s stake, valued at ~₹682.5 crore. |
Risks and Challenges
- 1. **Order Cancellations**: The cancellation of a ₹2,700 crore Saudi desalination order in December 2024 led to a sharp 16% drop in stock price, highlighting vulnerability to large contract risks.
- 2. **Low Dividend Payout**: Despite repeated profits, the company does not pay dividends, which may deter income-focused investors.
- 3. **Poor Historical Sales Growth**: Sales growth of 0.54% over the past five years is weak compared to peers.
- 4. **Profit Volatility**: Net profit declined significantly in FY23 (-91.7% YoY), indicating inconsistency.
- 5. **High Valuation**: P/E and P/B ratios are at a premium to peers, suggesting the stock may be overvalued relative to fundamentals.
- 6. **Market Risks**: Trading in financial instruments carries high risks, and prices may be affected by external factors like regulatory or political events.
Future Outlook of VA Tech Wabag Ltd
**Revenue Growth**: Posts on X suggest a projected revenue CAGR of 15–20% over the next 3–5 years, with EBITDA margins expected to sustain at 13–15%.
**Order Book Expansion**: Despite the Saudi order cancellation, new orders (e.g., solar PV and international contracts) indicate diversification and growth potential.
**Industry Tailwinds**: Increasing global demand for water treatment and sustainability solutions, especially in India and emerging markets, supports long-term growth.
**International Expansion**: Entry into markets like Russia and a strong overseas order pipeline (57% of new orders) enhance visibility.
**Analyst Optimism**: High target prices (₹1,808–₹2,064) reflect confidence in the company’s ability to capitalize on its order book and operational improvements.
Investment Considerations
**Recommendation**:
VA Tech Wabag is a compelling long-term investment for growth-oriented investors due to its strong order book, international presence, and analyst backing. However, the recent technical “Sell” signal, high valuation, and order cancellation risks warrant caution. Investors should monitor upcoming quarterly results and order book updates. Conduct thorough due diligence and consult a financial advisor before investing, as stock trading carries significant risks.
—
**Sources**
– Economic Times:[] (https://economictimes.indiatimes.com/va-tech-wabag-ltd/stocks/companyid-20188.cms)
– Screener.in:[] (https://www.screener.in/company/WABAG/consolidated/)
– Moneycontrol:[](https://www.moneycontrol.com/india/stockpricequote/infrastructure/vatechwabag/VTW)
– Simply Wall St:[](https://simplywall.st/stocks/in/utilities/nse-wabag/va-tech-wabag-shares)
– Trendlyne:[](https://trendlyne.com/research-reports/stock/1507/WABAG/va-tech-wabag-ltd/)
– Investing.com:[](https://in.investing.com/equities/va-tech-wabag-ltd)[](https://www.investing.com/equities/va-tech-wabag-ltd)
– CNBC TV18:[](https://www.cnbctv18.com/market/stocks/va-tech-wabag-share-price-multibagger-best-in-ten-years-19525874.htm)
– Equitymaster:[](https://www.equitymaster.com/research-it/annual-results-analysis/VTECH/VA-TECH-WABAG-2022-23-Annual-Report-Analysis/5071)
– Value Research:[](https://www.valueresearchonline.com/stocks/45426/va-tech-wabag-ltd/)
– X Posts:
**Disclaimer**:
This analysis is for informational purposes only and should not be construed as investment advice. Stock market investments carry high risks, and past performance does not guarantee future results. Always seek professional advice before making investment decisions.
