The math is simple. VA Tech Wabag sits on a ₹20,000 crore order book. That’s five times its FY26 revenue. Motilal Oswal published a note on Monday, October 12, reiterating its 'buy' recommendation with a target price of ₹2,529 per share. The brokerage sees 30% upside from current levels, betting on regular order flows and normal project execution.
The stock reacted instantly. Shares jumped as much as 6% in early trading on Thursday, touching ₹2,007.5. But the momentum cooled. It now trades 1.2% higher at ₹1,960 on the NSE. Context matters here: the stock is up 50% year-to-date. Yet, it remains 15% away from its all-time high of ₹2,319, hit on September 15. All 13 analysts covering the stock maintain a 'buy' rating.
Why the confidence? Motilal Oswal points to high-quality orders secured over the past six months. A repeat order worth ₹250 crore from Reliance Industries for EPT work in Jamnagar stands out. The company also entered Kuwait and UAE markets, bagging orders worth ₹100 crore and ₹600 crore respectively. In India, new wins with BWSSB and DJB bolster the pipeline, while a project in Austria from Donauinsel Water Works adds European exposure. The Chennai desalination project is moving toward competition, signaling further visibility.
Financials support the narrative. From FY21-26, VA Tech Wabag delivered a 7% CAGR in revenue, 17% in EBITDA, and 28% in adjusted PAT. Motilal Oswal expects acceleration: 19% revenue CAGR, 26% EBITDA CAGR, and 23% adjusted PAT CAGR over FY26-28. Overseas projects contribute 50% of revenue and carry better working capital cycles than domestic ones. The company holds a net cash position of ₹1,000 crore, with strong free cash flow generation. At 21 times its estimated FY28 P/E, the valuation remains attractive given the margin expansion in high-value EP and O&M segments.
The path forward hinges on execution. Motilal Oswal notes that desalination plants are non-discretionary, ensuring business continuity even in volatile regions like West Asia. The brokerage forecasts 20% revenue growth over the next three to four years, driven by this strong bid pipeline. For investors, the next catalyst lies in the steady conversion of this massive order book into bottom-line growth, with the stock poised to close the gap to its record high if execution remains on track.