Among the stocks we cover, Va Tech Wabag (CMP: Rs 1288, Market capitalisation: Rs 8011 Crore, Stock Rating: overweight) could be a direct beneficiary of the Union Budget’s emphasis on urban centres and urban dwellers. The focus on housing, water treatment and management, and other areas such as employment, industrial corridors, etc. should also benefit this company.
Va Tech Wabag is one of the leading players in the water and water treatment space, having a strong market presence supported by technical capabilities. The budget announced that the Centre along with the states, in collaboration withmultilateral agencies,
will initiate water supply, sewage treatment, and solid waste management projects in about 100 cities. Moreover, it also said that the treated water would be used for irrigation and stored in tanks to improve supply. The new initiatives could offer huge opportunities to domestic players and provide strong visibility to companies such as Va Tech Wabag. The company is sitting on an order book of about Rs 12,000 crore, or 4 times its annual revenue, and is eying bigger orders in the domestic market.
Apart from direct policy initiatives, other announcements such as the government’sto develop cities as Growth Hubs”, develop urban areas, including town planning schemes, andtransit-oriented development plans for 14 large cities of above 31 lakh population augur well for companies in the water sector. Post the budget announcements, the Va Tech stock gained during the day. Even at the current price of Rs 1280 a share, trading at 22 times its fiscal 2026 estimated earnings, it offers good value.
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