WABAG

Positioned for 15–20% Revenue CAGR Amid Emerging Sector Opportunities

reported healthy Q3FY26 performance, supported by strong execution of overseas projects and disciplined margin management. With a robust order book equivalent to five times annual revenue, structural margin discipline, and a historically strong net cash balance sheet, earnings visibility remains solid. Management reiterated medium-term guidance of 15–20% revenue CAGR with sustainable margins, aided by international diversification and emerging sector opportunities. - Revenue: +18.5% YoY, driven by faster execution of large overseas projects (desalination in Saudi Arabia, sewage treatment in Middle East & Africa). - EBITDA: +21% YoY, supported by operating leverage, tighter cost management, and favourable EPC/O&M mix. - EBITDA margin: 12.64%, up 26 bps YoY. - PAT: ₹92 crore, +30.6% YoY, aided by stronger operations, stable finance costs, and normalized tax rate. Order Book & Revenue Visibility - Order book: ₹16,300 crore, ~5x annual revenue. - Mix: 64% EPC, 36% O&M. - Quarterly order intake: ~₹1,200 crore. - Domestic pipeline: ~₹3,000 crore in advanced closure stages. - International projects: ~50% of revenue, expected to remain stable despite GCC oil price volatility. Emerging Sector Opportunities - Solar manufacturing: Executing funded plant, enhancing eligibility for future projects. - Green hydrogen: Significant ultra-pure water demand potential. Balance Sheet & Cash Flow - Net working capital days: Improved to ~101, driven by tighter receivables and multilateral-funded projects. - Cash: ₹1,518 crore, net cash position ₹891 crore (ex-HAM debt >₹1,000 crore). - Liquidity comfort supports growth and execution flexibility. Valuation & Outlook - Valuation: ~16x FY28E earnings, reasonable given growth visibility. - Medium-term guidance: 15–20% revenue CAGR, margins in 13–15% band. - Outlook: Strong order visibility, disciplined execution, and diversification support rerating potential.