VA Tech Wabag Q1 Results Review - Pole Position In Order Prospects: ICICI Securities

ICICI Securities Report

VA Tech Wabag Ltd. revenues grew by 13% YoY, Ebitda margin came in at 13% (plus 110 basis points YoY) and Ebitda grew by 24% YoY in Q1 FY25. Management reiterated its guidance of 15–20% growth in revenues and 13–15% Ebitda margin in FY25E.

Order inflow has been subdued for the quarter; however, it is the preferred bidder for Rs 60 billion worth of projects – which is likely to get finalised in the next couple of quarters. Note that order inflow in FY24 was subdued at Rs 24 billion.

Order book at the end of the quarter closed at Rs 95 billion – Rs 52 billion of EPC (2.2 times EPC revenues) and Rs 42 billion of operations and maintenance. A strong order inflow in the near term remains critical for sustained growth of 15–20% in revenues.

We estimate an OI of Rs 60 billion in FY25E. Maintain 'Buy' with a revised target price of Rs 1,445.

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