Buy VA Tech Wabag; target of Rs 1877: Geojit Financial Services

Geojit Financial Services is bullish on VA Tech Wabag has recommended buy rating on the stock with a target price of Rs 1877 in its research report dated December 02, 2025.

Broker Research

December 03, 2025 / 11:33 IST

Buy

26 Aug, 2025 12:21

Volume

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Geojit Financial Services research report on VA Tech Wabag

VA Tech Wabag (VATW), is a Chennai-based multinational company specialising in water technology. With its expertise in the turnkey execution and operation of water and wastewater treatment plants, the company primarily serves both municipal and industrial sectors, focusing on providing comprehensive solutions for water-related challenges. H1FY26 consolidated revenue increased 18.2%YoY to ₹1,569cr, driven by strong growth in EPC municipal projects (+45%) and a sharp uptick in O&M industrial activity (+93%), though partially weighed down by softer performance in the EPC industrial segment. H1FY26 EBITDA grew 5.7%YoY, although Q2FY26 EBITDA declined 4.6% YoY to ₹89.3cr, impacted by a higher EPC contribution, which pushed cost of sales up by 23.2% YoY. Other income surged 201.4% YoY in Q2FY26, taking H1FY26 other income up 115% YoY, primarily driven by forex gains. Q2FY26 PAT rose 20.6% YoY to ₹85cr, bringing H1FY26 PAT to ₹151cr, up 20.4% YoY. The company reported a net cash position (ex-HAM) of ₹675cr, extending its streak to 11 consecutive quarters in positive net cash. Net working capital days came in at 121, highlighting sustained operational discipline and efficiency. The order book (ex-framework contracts) rose 10.1% YoY to ₹14,764cr, ensuring nearly 4x revenue visibility. Management maintained its medium-term guidance of 15–20% revenue CAGR and 13–15% EBITDA margins.

Outlook

We value the stock at 25x FY27E EPS of ₹75.1, arriving at a target price of ₹1,877, and maintain our BUY rating.

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