VA Tech Wabag

Profile Highlights

• Long-duration O&M: EPC and O&M orders were in a ratio of ~58:42; O&M contracts can run for 15 years+.
• Desalination and new demand: The profile cites an INR 1,000 Cr. order from Indosol Solar for seawater desalination for a 10 GW solar PV manufacturing unit.

Key Risks

• Cancelled award: A confirmed INR 2,700 Cr. Saudi seawater desalination order was cancelled in Dec’24; the authority planned to retender it.
• Receivables and margins: Municipal orders make up ~85% of the order book (Sep’24), and the report identifies receivable cycles and sustained margins as monitorables.

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Rating rationale

Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.

• Buy:> 15%
• Hold: -5% to 15%
• Reduce: -15% to -5%
• Sell: <-15%