Shares of VA Tech Wabag Limited have reclaimed the significant Rs 2,000 mark, trading at Rs 2,008 in the latest session. This surge represents a 3.77% gain from its previous close of Rs 1,935.30, pushing the company's market capitalization to Rs 12,223 crore.
The positive movement follows a reiteration of a 'buy' call by brokerage firm Motilal Oswal Financial Services (MOFSL). MOFSL has set a price target of Rs 2,529 for VA Tech Wabag, indicating a potential 30% upside from its recent closing price.
Jhunjhunwala's Stake and Analyst Confidence
The stock, often associated with the late investor Rakesh Jhunjhunwala, continues to be a notable holding for his wife, Rekha Rakesh Jhunjhunwala. As of the June 2026 quarter, she held a substantial 8.02% stake in the company, equivalent to 50 lakh shares.
MOFSL's optimistic outlook is underpinned by strong financial projections and operational visibility. The brokerage estimates a Compound Annual Growth Rate (CAGR) of 19% for revenue, 26% for EBITDA, and 23% for Adjusted Profit After Tax (APAT) over the fiscal years 2026-2028. This follows a strong performance between FY21-26, which saw CAGRs of 7%, 17%, and 28% respectively for the same metrics.
Strong Fundamentals and Order Book
The report highlights several attractive aspects of VA Tech Wabag. The company boasts robust free cash flow generation and a net cash position exceeding Rs 10 billion. Improving return ratios, with pre-tax Return on Capital Employed (RoCE) and Return on Invested Capital (RoIC) projected at 23% and 36% respectively by FY28E, further bolster its investment appeal.
A significant factor contributing to the positive sentiment is VA Tech Wabag's substantial current order book, valued at Rs 20,000 crore. This represents five times the company's FY26 revenue, with 40% of these orders originating from the Middle East. This strong pipeline provides clear visibility for 15-20% revenue growth over the next three to four years.
Company Profile
VA Tech Wabag Limited specializes in the critical field of water treatment. Its core activities encompass the design, supply, installation, construction, and operational management of a wide array of plants, including those for drinking water, wastewater treatment, industrial water treatment, and desalination. The company offers comprehensive solutions for various water challenges, including water reclamation and sludge treatment.
Technically, the stock's Relative Strength Index (RSI) stands at 41.2, suggesting it is currently trading in a neutral zone, neither overbought nor oversold. Despite a one-year beta of 1.32, indicating high volatility, the company's fundamentals and future outlook appear strong according to analyst reports.