Wastewater Management stock is a buy right now with an upside of over 50%. Do you own it?
One of Jhunjunwala’s shares is engaged in the design, construction, operation and maintenance of water treatment and desalination plants for municipal and industrial customers. The stock has an upside of 52.72% from its peak, and ICICI Direct has set a purchase target price of Rs. 2,308.
stock price movement
The market capitalization is Rs. 9,398.84 crores, shares of Va Tech Wabag Limited closed at Rs. It was 1511.30 won per share, down about 1.95% from the previous day’s closing price of Rs. 1541.40. The stock price is down 22.64% from its 52-week high.
Company Overview
VA Tech Wabag Limited, founded in 1924, is a 100-year-old multinational corporation headquartered in Chennai, India. The company is a global leader in water and wastewater treatment solutions. The company specializes in designing, supplying, installing and maintaining drinking water, wastewater treatment and industrial water treatment plants.
Operating across four continents, the company has delivered more than 6,500 projects and holds more than 125 intellectual property rights, demonstrating its commitment to innovation.
target price
ICICI Direct maintains a Buy rating on VA Tech Wabag Limited and sets a target price of Rs. 2,308 with an upside of 52.72% from the closing price of Rs. 1511.30.
rationale
VA Tech Wabag’s operational and financial performance is expected to improve significantly with projected revenue, EBITDA and PAT growth rates of 7.4%, 21.9% and 24.9% CAGR over FY24-27E. Focusing on returns and an asset-light model, the company is valued at Rs. 2,308 or 30x FY27E EPS.
order sheet
VA Tech Wabag has seen strong order inflow of over Rs. $460 billion in the first half of 2025 (57% from international customers and 31% from industrial sectors). The company’s order value is over Rs. Sales are KRW 1450 billion and are expected to reach KRW 50 billion. $16,000 billion by the end of FY25 (mainly driven by international markets).
The company has already secured preferred bidder status in a project worth Rs. $350 billion, expected to be converted soon. The company is on track to surpass its FY25 order intake guidance targeting Rs. Total inflows are $800 billion and we continue to focus on E&P projects and international growth.
In the latest development, the company announced that Saudi Arabia had canceled orders worth around $317 million (about Rs 270 billion) on September 6. This order was for the EPCC of a 300 MLD Mega SWRO desalination plant in Yanbu.
project
VA Tech Wabag’s major projects include the 400 MLD Peruvian Desalination Plant in Chennai, where top engineering and civil works are well underway, and the 200 MLD Sewage Treatment Plant in Pagla, Bangladesh, which has restarted after a two-month shutdown.
Additionally, the Kolkata HAM project successfully achieved its Commercial Operation Date (COD), marking a significant milestone in the company’s project portfolio.
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Major orders received in H1FY25
In the first half of FY25, the company entered the solar PV segment with Rs. ₹1,000 crore contract for Indosol Solar’s 100 MLD desalination project, including O&M for 15 years. Other notable orders include repeat business from Nemmeli Chennai factory and Rs. $300 million contract with Reliance Industries.
stock holding pattern
As of September 2024, Va Tech Wabag Limited had a majority stake of 19.12% by promoters, 14.68% by foreign institutional investors, 3.59% by domestic institutional investors, and 62.59% by the public. In public equity, Rekha Rakesh Jhunjunwala holds 8.04% stake in Va Tech Wabag Limited.
Recent Quarterly Performance and Ratios
Va Tech Wabag Limited’s revenue increased from Rs. 665 million in the second quarter of fiscal 2024. In the second quarter of fiscal 2025, it grew 5.26% to $700 million. Va Tech Wabag Limited’s net profit also increased by 16.67% at Rs. 60 crore in the second quarter of FY24 to Rs. $7 billion in the second quarter of 2025.
Va Tech Wabag Limited’s revenue and net profit have grown at a CAGR of 2.80% and 31.35%, respectively, over the past four years.
In terms of rate of return, the company’s ROCE is expected to be 19.8% and ROE to be 13.8%. The company’s debt ratio is 0.22 times, making it a company with almost no debt. Va Tech Wabag Limited’s EPS is Rs. 42.
Written by – Nikhil Naik
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