Motilal Oswal bullish on VA Tech Wabag; strong order book supports growth

Motilal Oswal remains constructive on VA Tech Wabag’s outlook, citing sustained order inflows, a robust order book and improving profitability as key drivers for long-term growth. The brokerage has reiterated its ‘Buy’ rating on the stock with a target price of ₹1,900, backed by strong revenue visibility, margin resilience and a healthy balance sheet.

 

On the bourses, VA Tech Wabag share price rose as much as 6.17 per cent to an intraday high of ₹1,349, before trading 2.81 per cent higher at ₹1,306.20 around 12:50 PM. By comparison, BSE Sensex was trading 0.59 per cent higher at 85,174.36 levels.

 

 

VA Tech Wabag’s prospects are anchored by a solid order book of over ₹16,000 crore, translating into a healthy book-to-bill ratio of ~4.6x trailing twelve-month revenues. In December 2025, the company secured a large repeat order worth up to ₹700 crore from the Saudi Water Authority for a technologically advanced 50 MLD brackish water reverse osmosis (BWRO) plant at Aljouf. Around the same time, it was declared the preferred bidder by the Saudi Water Partnership Company for the Hadda Independent Sewage Treatment Plant (ISTP) project.

 

Earlier, in November 2025, VA Tech Wabag won another major repeat order from Nepal’s Melamchi Water Supply Development Board for the design, build and operate (DBO) of the 255 MLD Sundarijal Water Treatment Plant in the Kathmandu Valley. The project is funded by the Asian Development Bank, reinforcing the company’s focus on well-funded, low-risk projects. Motilal Oswal also highlights the ultra-pure water segment as an emerging opportunity, estimating it to be a ₹3,500 crore addressable market for the company.

 

According to the brokerage, regular order inflows, preferred bidder status in projects worth around ₹3,000 crore, and a strong bid pipeline of ₹15,000-20,000 crore – with an estimated 30 per cent win rate – provide visibility for 15-20 per cent revenue growth over the next three to four years. While a large part of the current order book is skewed towards high-volume, lower-margin EPC projects, the company continues to focus on profitable growth by selectively bidding for higher-margin EPC, O&M and industrial projects across India, the Middle East, Africa and CIS countries.

 

VA Tech Wabag is tracking well within its guided adjusted Ebitda margin range of 13-15 per cent, with margins at around 13 per cent in the first half of FY26. Its net cash position stood at ₹560 crore at the end of H1FY26, rising to ₹670 crore excluding HAM projects. Execution of large projects, such as the 400 MLD Chennai desalination plant, 300 MLD Yanbu desalination plant, and Al Haer ISTP plant in Saudi Arabia, along with higher exposure to EP, O&M and overseas segments, are expected to support margins. Notably, bad debt provisioning has declined materially over the past several years due to disciplined bidding in sovereign- and multilateral-funded projects.

 

Motilal Oswal estimates a 17 per cent revenue CAGR and over 20 per cent CAGR in Ebitda and PAT over FY25-FY28. With strong free cash flow generation, a net cash balance sheet and improving return ratios, the brokerage finds the stock attractive at ~17x FY27E and ~14x FY28E earnings, and continues to reiterate its ‘Buy’ rating.

 

 

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