Target: ₹391

CMP: ₹310.05

VA Tech Wabag (VATW) is one of the leading multinational companies into water and wastewater treatment space, largely focused on providing EPC and O&M solutions across the globe. Its vast project design, execution & operation experience, superior proprietary technology to provide customised solutions, & professional management team with proven competence have enabled it to command a healthy market share in water, sewage and waste management segments.

VATW It has achieved a healthy 30‐35 per cent bid‐hit ratio globally as well as domestically on the strength of its whole range of competitive and customized value chain services.

VATW has a proven track record of bagging large and complex projects; as on Dec‘21, its order book stands at ₹10,000 crore implying an order book‐to‐bill ratio of 3.3x trailing revenues, which provides revenue visibility for the next couple of years.

Given the growing attention of the government and multi‐lateral funding agencies towards an escalating water shortage crisis, the water treatment sector is well poised for a secular, long‐term growth. In our view, VATW’s robust order book thriving on strong market leadership, execution ramp up, operational efficiencies would help it capitalise on the forthcoming opportunities.

We initiate coverage on VATW with a Buy recommendation for a price target of ₹391.

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