Shares of VA Tech Wabag, a prominent Indian water treatment company, are anticipated to see substantial growth, with brokerage firm Systematix projecting a 43% upside within the next year. The company, which counts late ace investor Rakesh Jhunjhunwala's wife, Rekha Jhunjhunwala, among its key stakeholders (holding an 8.02% stake or 50 lakh shares as of March 2026), has received a 'buy' recommendation with a revised price target of Rs 2075.
Strong Fundamentals Drive Optimistic Outlook
Systematix's positive outlook for VA Tech Wabag is underpinned by several factors, including strong project execution, a healthy order book, and favorable industry tailwinds. The stock closed at Rs 1452.30 on May 26, 2026, and its market capitalization stands at Rs 9049 crore. Historically, the stock has demonstrated significant gains, rising 224% over three years and an impressive 431.39% over five years from Rs 273 on May 25, 2021.
Technically, VA Tech Wabag shares are trading above their 5-day, 10-day, 20-day, 50-day, 100-day, 150-day, and 200-day moving averages, indicating a positive trend. Its Relative Strength Index (RSI) is at 57.7, suggesting the stock is neither in the oversold nor overbought zone.
Expanding Opportunities and Robust Performance
The management of VA Tech Wabag is confident in sustaining a 15-20% revenue Compound Annual Growth Rate (CAGR) over the medium term. This growth is expected to be fueled by expanding global water infrastructure opportunities across India, the GCC region, Africa, and Southeast Asia. Additionally, emerging segments such as ultra-pure water (UPW), green hydrogen, semiconductors, data centers, and Bio-CNG are set to contribute to the company's trajectory.
In the fourth quarter of the fiscal year, the company reported a 29% year-on-year increase in net profit, reaching Rs 128.3 crore. Revenue also grew by 22.3% year-on-year to Rs 1,414.4 crore, though the EBITDA margin saw a slight dip to 11.1% from 12.2% in the corresponding quarter last year.
Strategic Focus and Market Potential
VA Tech Wabag continues to prioritize selective, margin-accretive projects, particularly those backed by multilateral funding or sovereign guarantees, to mitigate balance sheet risks. The global total addressable market (TAM) for water opportunities is estimated at USD 75-100 billion over the next 5-7 years, with India alone presenting a USD 25-30 billion opportunity through major government-led infrastructure programs like Jal Jeevan Mission 2.0, AMRUT 2.0, and Namami Gange.
Systematix has raised its EBITDA estimates for FY27E/FY28E by 4.5%/4.8% respectively, forecasting robust revenue/EBITDA/PAT CAGR of 18%/24%/25% over FY26–FY28E. Return on Equity (RoE) and Return on Capital Employed (RoCE) are projected to improve to 16% and 19% respectively by FY28E, reinforcing the brokerage's strong 'buy' recommendation.