VA Tech Wabag Limited

Industrials — Engineering & Construction · NSE

₹1,892.00−₹17.60 (−0.92%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by high debt relative to equity, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of VA Tech Wabag Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

VA Tech Wabag Limited, together with its subsidiaries, engages in the design, supply, installation, construction, operation, and maintenance of drinking water, waste and industrial water treatment, and desalination plants in India and internationally.

IndustryEngineering & Construction

SectorIndustrials

Employees2,000

Annual revenue₹3,908 Cr

How does it make money?

Turns over ₹3,908 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 2,000 employees supports ₹1.95 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin15.6%

Net margin9.5%

Revenue / employee₹1.95 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

ADANI PORT & SEZ LTDP/E 29.9x · ROE 14.1%

SIEMENS LTDP/E 88.8x · ROE 10.5%

What is its competitive advantage?Some evidence

ROCE of 16.3% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE16.3%

ROE14.4%

Peer median ROE14.1%

What is the outlook?

9 analysts covering the stock expect revenue to grow about 17.3% and earnings to grow about 22.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+17.3%

Est. earnings growth+22.9%

Analysts9

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +33% while net margin moved +2048% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+33%

Margin effect+2048%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.78 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

73/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

67/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

29.3x

3Y Median

38.3x

40 monthly readings · mean 137.8x · range 23.0x–648.6x

Sector Median

30.1x

median of 3 sector peers

🟢Current valuation is approximately 23% below its 3y median of 38.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 30.1x.

vs. its own history

Cheap

38.3x median over 40 months · -23%

vs. sector peers

Fair

30.1x median of 3 peers · -3%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

29.3x

P/B

4.59x

EV/EBITDA

18.5x

PEG

0.14

Dividend Yield

0.26%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 12.6% to 15.6% over 3 years.
Cash generation is improving
Free cash flow is up 153% over 3 years.
Return on equity is rising
ROE has improved from 0.8% to 14.4%.
Return on capital is rising
ROCE has improved from 2.6% to 16.3%.
Valuation below its historical average
At 29.3x the stock trades 23% below its own median of 38.3x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 67% against revenue growth of 33% — customers are taking longer to pay.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 8.87x — earnings must service borrowings before shareholders see anything.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Receivables growing faster than salesFinancial
Receivables up 67% against revenue up 33% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 12.6% to 15.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 23% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 8.87x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 67% against revenue up 33%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 14%✓ 15.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 7% a year✓ 9.9% CAGR
Latest reported year was 20.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹202 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹11,828 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

29.3x

Fair

Fairly valued against the generic band

P/B Ratio

4.59x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹64.53

Profitable

Profitable on a per-share basis

ROE

14.4%

Moderate

Moderate capital efficiency

ROCE

16.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

8.87x

High

High leverage

Revenue Growth (YoY)

20.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

36.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.26%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹202 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1,892

P/E (Forward)

20.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

8.8%

Average

Average margins

Net Margin

9.6%

Average

Average bottom-line conversion

Current Ratio

1.71

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.78

Defensive

Steadier than the market

52W Range Position

67%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

2003.8 / 2016.5

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

36.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,946 Cr	₹2,827 Cr	₹3,276 Cr	₹3,908 Cr	+9.9%
EBITDA	₹373 Cr	₹359 Cr	₹396 Cr	₹611 Cr	+17.9%
EBITDA Margin	12.6%	12.7%	12.1%	15.6%	—
PAT (Net Profit)	₹13 Cr	₹246 Cr	₹295 Cr	₹371 Cr	+205.5%
EPS	₹2.07	₹39.49	₹46.8	₹58.72	+205.0%
ROE	0.8%	13.5%	13.8%	14.4%	—
ROCE	2.6%	14.7%	15.2%	16.3%	—
Total Debt	₹219 Cr	₹289 Cr	₹362 Cr	₹228 Cr	+1.4%
Free Cash Flow	₹80 Cr	₹122 Cr	₹351 Cr	₹202 Cr	+36.2%

🟢 Revenue has grown at 9.9% a year over 3 years.

🟢 EBITDA has grown at 17.9% a year over 3 years.

🟢 EBITDA Margin has risen from 12.6% to 15.6% over 3 years (+3.0 pts).

🟢 PAT (Net Profit) has grown at 205.5% a year over 3 years.

🟢 EPS has grown at 205.0% a year over 3 years.

🟢 ROE has risen from 0.8% to 14.4% over 3 years (+13.6 pts).

🟢 ROCE has risen from 2.6% to 16.3% over 3 years (+13.7 pts).

🟡 Total Debt has been broadly flat over 3 years (1.4% a year).

🟢 Free Cash Flow has grown at 36.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹6,122 Cr

Total Liabilities

₹3,549 Cr

Total Debt

₹228 Cr

Cash & Equivalents

₹765 Cr

Operating Cash Flow

₹207 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

18.3%

Insider Holding

27.0%

Corporate Actions

Dividend Rate

₹5

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

9 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹2,323.67

+22.8% vs CMP

Target Range

₹1,870 – ₹2,530

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

4 positive1 mixed1 general

Va Tech Wabag Q1FY27 net profit up 37% to ₹901 Mn; order book at record ₹194 Bn

scanx.trade, 18 OctOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Stocks to buy: 5 midcap and chemical stocks with up to 25% upside potential

The Economic Times, 19 Aug

Rekha Jhunjhunwala portfolio stock VA Tech Wabag jumps 5%; Axis Securities raises target price after Q1 results

Livemint, 14 AugAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

Rekha Jhunjhunwala-backed VA Tech Wabag rises 4% on order win; up 58% YTD

Business Standard, 01 JulOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Water Tech Firm VA Tech Wabag Bags a ‘Large’ Order in Austria; Jumps 4.18%

HDFC Sky, 01 JulOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

VA Tech Wabag shares jump over 5% on bagging orders worth up to ₹600 crore in Bengaluru

Upstox, 19 JulPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong14.5/20

🟢Financial HealthStrong13.9/20

🟢GrowthStrong16.1/20

🟡ProfitabilityModerate9.6/15

🟡ValuationFair9.5/15

🔴RiskHigh4.3/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 14%15.6%
✓Revenue growth stays above 7% a year9.9% CAGR
✓Free cash flow remains positive₹202 Cr
✓Debt / EBITDA stays below 2x0.4x
✓ROCE stays above 13%16.3%