VA Tech Wabag: Revenue Up 20%, 14.5% EBITDA Margin

WABAG VA Tech Wabag (NSE : WABAG) designs and operates water treatment, desalination and wastewater plants. Industry surveys rank it among the top three global private water operators for desalination. O&M contracts generate recurring revenue at higher margins than EPC. India's water and wastewater treatment market is projected to grow from $3 billion in FY25 to $5.2 billion by FY31. What happened: In Q2FY27, revenue grew 19.9% year on year to Rs 1,000.2 crore. EBITDA grew 20% to Rs 144.6 crore at a 14.5% margin. Net profit grew 23.3% to Rs 104.6 crore. Cash from operations in H1FY27 was Rs 225 crore, up from Rs 206.7 crore. Cash balances rose to Rs 1,217.2 crore. Net working capital improved to 101 days from 104 at the end of FY26. Why it matters: The order backlog was Rs 20,207.1 crore on November 8, 2026, over four times annual revenue. O&M is 32% of backlog. Two large wins drove recent intake: a 272 MLD Kuwait desalination project and the Reliance Jamnagar plant. Management expects strong order additions from the Middle East, Africa and India over the next 12 to 18 months. What I am watching: Pure EP contracts reached nearly 80% of H1FY27 order intake; management targets a 20-30% share going forward. Va Tech is entering semiconductors and data centres, supplying ultra-pure water for chip fabs and helping data centres switch from air to water cooling. My stance: Va Tech trades at 29.7 times earnings, above its five-year median of 20.6 times and the industry median of 20.4 times. ROCE is 21.3% and ROE is 15.9%. The order book and cash generation are strong. The re-rating prices in the high-tech expansion before it has contributed meaningfully to earnings. I do not hold a position in VA Tech Wabag at the time of writing. This is not investment advice.