This article first appeared on GuruFocus .
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Revenue (Consolidated):INR 887 crores, up 20.8% year-over-year.
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EBITDA (Consolidated):INR 116 crores, up 21.7% year-over-year, with an EBITDA margin of over 13%.
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PAT (Consolidated):INR 90 crores, up almost 37% year-over-year, with a PAT margin of 10.2%.
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Revenue (Standalone):INR 739 crores, up over 15% year-over-year.
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EBITDA (Standalone):INR 105 crores, up over 21% year-over-year.
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PAT (Standalone):INR 79 crores, up over 30% year-over-year.
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Revenue Mix:EPC contributed 82% of revenues, while O&M contributed 18%.
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Geographic Revenue Split:48% from India and 52% from overseas markets.
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Net Cash Position:INR 965 crores (excluding HAM), maintaining net cash positive for the 14th consecutive quarter.
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Net Working Capital Days:108 days.
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ROCE:19.6%.
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ROE:16%.
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Order Intake:Over INR 3,400 crores (INR 34 billion), with EPC at INR 29.6 billion and O&M at INR 4.7 billion.
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Order Book:Historic high of INR 19,400 crores (INR 194 billion), over 4 times the revenue base, with 66% EPC and 34% O&M.
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Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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VA Tech Wabag Ltd ( BOM:533269 ) reported a strong Q1 FY27 with revenue growth of 20.8% YoY and PAT growth of 37% YoY, indicating robust operational performance.
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The company achieved a historic high order book of INR194 billion (over 4x revenue), providing strong revenue visibility for the coming years.
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VA Tech Wabag Ltd ( BOM:533269 ) maintained a net cash positive position for the 14th consecutive quarter, with net cash at INR965 crores, underscoring a strong balance sheet.
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The company expanded its geographical footprint with landmark order wins in Kuwait and UAE, diversifying its GCC presence beyond Saudi Arabia.
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The company's focus on technology-led, asset-light projects, including advanced desalination and resource recovery, positions it well for high-margin opportunities in emerging sectors like data centers and semiconductors.
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The company's O&M portfolio continues to grow, providing predictable, margin-accretive, and cash-accretive revenue streams, with a strong focus on increasing this segment's contribution.
Negative Points
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Gross margins saw a correction on a YoY basis in Q1, attributed to a project mix shift towards more EPC projects, which typically have lower margins than EP projects.
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Other expenses were higher in the quarter due to increased provisions for potential delays or defaults, reflecting a more stringent policy but impacting profitability.
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The company's O&M revenue growth was relatively modest at 7% YoY, which is slower than the overall company growth rate.
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The company's EBITDA margin remains at the lower end of its 13%-15% medium-term guidance band, with management expecting it to stay in the 13%-14% range for the current year.
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The company's order book was impacted by the prudent removal of INR600 crores in framework orders that were awaiting effectiveness, which reduced the reported backlog.
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The ongoing geopolitical situation in the Middle East, while not currently impacting operations, poses a potential risk to project execution and supply chains, requiring active management.
Q & A Highlights
Q: Can you provide more color on the landmark 60 MIGD SWRO desalination plant order in Kuwait and its strategic significance? A: Rohan Mittal, Head - Strategy & Business Growth - GCC, explained that this is Wabag's maiden project in Kuwait, delivered in partnership with HEISCO. It is strategically important as it provides a marquee reference in a new GCC market, strengthens credentials in large-scale desalination, includes an O&M component that fits the strategy of increasing recurring revenue, and combines Wabag's technology with local execution experience.
Q: What is the status of the order backlog, and why did it not grow sequentially despite strong order intake? A: Skandaprasad Seetharaman, Group CFO, clarified that the company prudently removed INR600 crores worth of framework orders from the backlog, even though they were signed and stamp duty paid, because they were waiting for effectiveness. The current order book of INR19,400 crores consists entirely of effective orders that are either under execution, waiting for an effective date, or in the O&M phase.
Q: How is the company managing execution and demand in the Middle East given the geopolitical situation? A: The CFO stated that projects are progressing well and are far from strike zones, being social and water-sustainable in nature. The company has historical experience managing through geopolitical events and has written contractual force majeure letters to customers to address any price increases or time delays. There are no material concerns regarding international revenues at this point.
Q: Can you explain the ForEx gains in the quarter and whether they are operational? A: The CFO emphasized that with over 52% of revenues coming from international geographies, ForEx gains are an integral part of operational results. These are transactional gains from invoices and payments, not translation gains. He noted that the company does not have ForEx loans or foreign asset liabilities, and these gains are factored into the bidding process.
Q: What is the company's strategy for the Industrial segment, and what is the target mix? A: The CFO stated that the traditional industrial market, primarily oil and gas, remains the core, with new sectors like data centers, solar, and semiconductors being a decadal view. The objective is to take the industrial order mix to around 20%-25% over time, with a special initiatives team developing these new industries.
Q: What is the current bid pipeline, and what is the order inflow target for the year? A: Rohan Mittal indicated a strong bid pipeline of approximately INR20,000-25,000 crores across regions, with projects in various stages from expression of interest to tender submission. The company has not given a specific order inflow target but is confident of maintaining an order book multiple of beyond three times revenue.
Q: How is the O&M business growing, and when will the Kodungaiyur project refurbishment start? A: The CFO noted that O&M growth was 7% Y-o-Y, which is structural as projects must be completed to move into the O&M phase. He expects growth to be viewed over a two-to-three-year period. Regarding Kodungaiyur, the agreement is signed, and the project report has been submitted to the PE, which is evaluating it. The refurbishment phase is expected to start any time now.
Q: How does Wabag compete with larger international players, and what is the domestic market outlook? A: Rohan Mittal highlighted Wabag's four-decade track record in the region, captive IP rights, and the advantage of having a workforce from countries like India, Turkey, and Egypt, which provides an overhead advantage. The tagline "European quality at Indian prices" reflects their competitiveness. On the domestic front, traction is improving, but international markets offer larger project sizes.
Q: What is the execution timeline for the current order book, and what are the margin expectations? A: The CFO explained that EPC orders internationally typically have a 24-30 month execution cycle, while India is around 36 months. The order book is expected to be executed over the next 36 months. On margins, the company maintains its 13%-15% EBITDA outlook, with a realistic expectation of 13%-14% this year, improving towards 15% over time.
Q: What is the status of the TSGENCO arbitration receivables? A: The CFO stated that the matter is sub judice, but the company has a clear verdict in its favor from the Supreme Court, which provides assurance of recoverability. He refrained from giving a timeline but assured transparent communication on significant updates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
