Axis Direct bullish on VA Tech Wabag as order book hits record Rs 19,400 crore

Axis Direct has turned bullish on VA Tech Wabag, flagging the company's record order book of Rs 19,400 crore – more than four times its annual revenue – as providing multi-year revenue visibility. The brokerage noted that the stock has gained 472% in five years and 241% in two years, and is trading above all key moving averages.

The company reported a 21% year-on-year rise in consolidated revenue to Rs 887 crore for Q1FY27. Net cash stood at Rs 965 crore for the 14th consecutive quarter. Order inflows crossed Rs 3,400 crore in the quarter, with international projects contributing 77% of the total. Key wins included desalination and wastewater treatment projects in Kuwait and the UAE. The company also removed roughly Rs 600 crore of non-effective framework contracts to sharpen backlog quality.

Management has retained its 15-20% revenue growth guidance for FY27. Beyond municipal projects, demand from semiconductor, solar, data centre and green hydrogen sectors is driving new opportunities. Return on capital employed was 19.6% and return on equity was 16% in Q1. Investors await the "Vriddhi 2.0" strategy, expected in May 2027, which may detail technology-led expansion and margin growth.