WABAG - VA Tech Wabag Limited Share Price

The management of VA Tech Wabag provided an optimistic outlook during the Q3 & 9M FY26 earnings call, highlighting a period of profitable growth driven by disciplined project execution and strong operational delivery. For the fiscal year-to-date, the company reported a 24% year-on-year growth in profit after tax (PAT), with consolidated revenue at Rs.2,530 crores, reflecting an 18% increase. The EBITDA for the period was Rs.347 crores, maintaining an EBITDA margin of 13.7%, within the guided range of 13% to 15%.

The company emphasized the strength of its balance sheet, with a net cash position exceeding Rs.1,000 crores, marking the 12th consecutive quarter in a net cash positive state. The order book expanded to over Rs.163 billion, with a well-balanced mix of 64% EPC and 36% O&M projects. Notably, international projects composed nearly 50% of the revenue, underscoring Wabag's growing global presence.

Management cited several key projects illustrating continued progress, such as the JICA-funded 400 MLD desalination plant in Chennai and the World Bank-funded wastewater treatment plants in Bangalore. They anticipate strong order inflow visibility across key geographies, backed by robust tendering momentum in India and substantial opportunities in sectors such as desalination and new energy.

Furthermore, management is targeting a sustainable growth trajectory of 15% to 20% annually and aims to maintain a healthy order book level of over 3 times revenue. They reiterated that a substantial part of their future growth will come from expanding into international markets, particularly the Middle East, CIS, and Southeast Asia.

Q&A Section Summary from Earnings Transcript

Question 1: Kishore Kumar from Unifi Capital asked about the order book and bid pipeline, specifically regarding the perceived stagnation in the domestic order book.

Answer: I appreciate your question, Kishore. Currently, our order backlog for India is healthy. We have about Rs. 3,000 crores in visibility with several prospects nearing conclusion. The bid pipeline is robust, and we're confident in conversions occurring early next year, driven by a mix of government and private investments.

Question 2: Kishore Kumar then inquired about the status of the investment platform with Norfund.

Answer: We're in the final stages, Kishore. Due diligence is largely complete, and we are negotiating definitive agreements. We expect this to be finalized in a couple of months, pending internal approvals from the involved funds.

Question 3: Nidhi Shah from ICICI Securities asked how many bids they were preferred in and their geographical locations.

Answer: We are currently preferred bidders in 2 to 3 major jobs, mainly in the Middle East and India. These include both larger jobs and numerous smaller ones, demonstrating our strong positioning in various markets.

Question 4: Nidhi Shah also requested an update on the Indosol project progress.

Answer: The Indosol project is progressing well; engineering is mature, and we're beginning supplier procurement. The customer is finalizing the site layout, which we expect to solidify soon, allowing us to expedite our contracting processes.

Question 5: Dhimant Shah from ITI AMC Limited asked about emerging sectors and growth from those.

Answer: We're actively exploring opportunities in desalination, solar manufacturing, and hydrogen. Our current engagements indicate strong prospects in these sectors, particularly for desalination, given its essential role in new energy developments.

This summary merges the major questions and detailed answers while adhering to the character limit as instructed. Please let me know if you need any more information!