WABAG - VA Tech Wabag Limited Share Price

In the Q1 FY26 Earnings Conference Call, management of VA Tech Wabag highlighted a strong performance and positive outlook. Key forward-looking points include:

1. Revenue Growth: The organization reported a consolidated revenue of INR 734 crores, marking a 17% year-over-year increase. Management continues to project a top-line growth of 15% to 20% for this fiscal year.

2. Order Book: The current order book stands at over INR 15,750 crores, approximately 5 times the annual revenue. This includes recently secured significant orders, such as an INR 380 crore contract for a wastewater treatment facility in Bengaluru and an INR 2,332 crore desalination project in Yanbu, Saudi Arabia.

3. Profitability: Consolidated EBITDA stood at INR 96 crores, growing by 18% year-over-year, with a PAT of INR 66 crores and a PAT margin of 9%, up over 20% year-over-year. The company aims to maintain EBITDA margins within the 13% to 15% range.

4. Cash Position: Wabag has sustained a net cash position for ten consecutive quarters, with cash reserves at INR 510 crores, allowing for swift project funding and support future growth.

5. Strategic Focus: The management emphasized a "˜Glocal' strategy focusing on both international markets and local depth, particularly targeting opportunities in emerging markets across water treatment and sanitation.

6. Technology Leadership: The organization aims to leverage its expertise in advanced water solutions, including desalination and effluent treatment, as government investments and market demands increase.

7. Dividend: As part of a commitment to shareholder value, the Board recommended a dividend of INR 4 per share for FY25, reflecting the company's robust financial health.

Overall, management expressed confidence in sustained revenue and profitability driven by disciplined bidding, a healthy order book, and a strategic focus on emerging market opportunities.

Q&A Section Summary from Q1 FY26 Earnings Call

1. Nidhi Shah: Question: "I would like to congratulate you on the excellent execution as well as the order inflow. So my question is firstly on the project that we have declared L1 in, which is the JV with HEISCO in Kuwait. What would be our share of that project?"

Answer: "As of now, we are still in the evaluation phase. We can confirm that our portion in the consortium will be a bit more than 50%, close to about USD 200 million."

2. Nidhi Shah: Question: "Also another question I had on the order book was regarding the Lusaka Water Supply and Sanitation Company project. Is the increase in order value due to scope changes?"

Answer: "Yes, the client requested certain scope increases to enhance sustainability. The value has gone up by about EUR 7-8 million prior to the contract commencement."

3. Nidhi Shah: Question: "Regarding the six active inquiries on the ultra-water pure segment, what is the progress on that? Are we closer to closing any order?"

Answer: "Yes, we are progressing well with a couple of orders, though the process is taking a bit longer than anticipated. We expect to see results in the upcoming months."

4. Sailesh Raja: Question: "In the domestic municipal segment, we are seeing a moderate 4% growth in order backlog numbers. Could you explain the reason for this?"

Answer: "We have not become more selective; our bidding criteria are strict. Over 98% of our backlog has complete payment security, which is vital for us."

5. Sailesh Raja: Question: "Regarding the 100 MLD solar desalination project, how do they plan to arrange the funding?"

Answer: "Funding is in place, but the delay was due to government changes and reallocating land. They are finalizing environmental studies, and the project should kickstart soon."

6. Sailesh Raja: Question: "On the plan to set up 100 biogas to CNG units, what is the business opportunity here?"

Answer: "We are partnered with PEAK Ventures as a funding agency. They handle raw material acquisition, and we focus on producing compressed biogas to sell at government-fixed attractive tariffs."

7. Sabil Dabhoya: Question: "Could you provide an update on the investment platform and existing HAM projects transferred?"

Answer: "Due diligence is ongoing, and we expect sign-off soon. We aim to monetize our investments as much as possible through this platform, including existing projects."

8. Aniket Jain: Question: "Are we expecting finalization on preferred bidder orders in Q2, and what is the status on remaining INR 2,500 crores?"

Answer: "We're confident about each project under preferred bidder status, including L1 on the Kuwait project. By our next call, we anticipate adding several of them to our backlog."

9. Jainam Jain: Question: "What is causing the slower execution on the Indosol Solar order?"

Answer: "The delay was due to land changes and necessary environmental studies related to the new site allocation. We're set to resume work shortly."

10. Kaushik Poddar: Question: "Given our order wins, can we expect around INR 80 billion in new orders by year-end?"

Answer: "It's positive to think that way. We're submitting substantial bids and the market is conducive. We're always hopeful for more positive outcomes."

This summary captures the essence of questions and responses provided during the call, maintaining the required context, detail, and forward guidance without exceeding 500 characters for each answer.