Target is 850 for va tech wabag

Adjusted net profit rose by 7% year-on-year to Rs. 63 crore, benefiting from a respectable revenue growth of 8.1% year-on-year, consistent margins, and increased other income, although partially offset by higher taxes. The order backlog currently stands at Rs. 11,866 crore, equivalent to 4.1 times the trailing twelve months’ revenue, with a promising order pipeline spanning across India, Russia, the Middle East, and various African countries. Va Tech’s strategic focus on technologically advanced EP projects, industrial and international ventures, along with an expanding share of O&M contracts, is expected to enhance margins, cash flows, and the working capital cycle. We anticipate a compound annual growth rate of approximately 9% for revenue and around 18% for adjusted net profit over the period from FY2023 to FY2026.
Our recommendation to BUY remains unchanged, with a revised price target of Rs. 850, driven by robust order inflow, a promising pipeline, and favorable margin trends. The stock is trading at an appealing price-to-earnings ratio of approximately 12x its FY2026 estimated earnings per share.

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