Edelweiss' research report on VA Tech Wabag
VATW posted strong top-line growth of 33% and 27% YoY for consolidated and standalone operations, respectively, led by execution of large jobs. However, cost provisions and weak margins in several low-end domestic jobs impacted standalone margin, which at 7.7% plummeted 830bps YoY.
Outlook
While we remain upbeat on execution and new order growth over the next 2-3 years given huge opportunities and VATW’s solid track record, our focus is primarily on working capital and liquidated damages, which are key risks that could hamper growth. We maintain ‘BUY/SO’.
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