Buy Va Tech Wabag; target of Rs 850: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' report on Va Tech Wabag"Va Tech Wabag’s focus markets: Apart from geographies where the company has strong presence, management indicated it is laying emphasis on key growth markets such as Saudi Arabia (mostly municipal jobs), Malaysia, Thailand, Philippines, Singapore and Latin America; 2) India’s ordering pipeline: Given upcoming elections in Tamil Nadu, management expects the 400MLD (~INR40bn) desalination project to be awarded on fast-track basis, of which 150MLD (Nemmeli II) worth INR15bn might be awarded over next 5-6 months; 3) the company is focusing on project closure recoveries: VATW has enhanced focus on project closures and cash recoveries, a senior resource has also been roped in for the same. We re-iterate our thesis on VATW wherein rising penetration in high-growth emerging markets will drive bottom-line apart from selective approach in domestic market. Management’s focus to improve RoCE, careful and strategic selection of jobs, strong design-execution capabilities and cost advantage are key MOATs, which will help VATW attain 37% CAGR in earnings over FY15-17E. Re-iterate ‘BUY’ with a target price of INR850", says Edelweiss research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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