Va Tech Wabag Q1 FY27 Earnings Call — Analysis (NSE: WABAG)

VA Tech Wabag posted record Q1 FY27 with revenue of ₹887 Cr (+20.8% YoY), PAT ₹90 Cr (+37% YoY), and an all-time high order book of ₹19,400 Cr driven by landmark GCC entries into Kuwait and UAE.

19 Aug 2026 · Analysis by Alpha Inflection

Result quality: stable — Steady quarter. Management sentiment: optimistic.

The take

Q1FY27 Consolidated Revenue from Operations ₹887 Cr ( +20.8% YoY ) . New guidance — FY27 fy27 consolidated revenue growth 15%-20% . New story: GCC market breakout with Kuwait and UAE entries .

Results

Revenue ₹887 Cr +20.8% YoY; EBITDA ₹116 Cr +21.7% YoY, margin over 13%; PAT ₹90 Cr +37% YoY; order intake over ₹3,400 Cr; order book ₹19,400 Cr.

Financial highlights

Guidance

Revenue growth in FY27 expected to be 15%-20%, with blended EBITDA margin in the 13%-14% range, while maintaining order backlog above 4x revenue.

What management committed to

• FY27 consolidated revenue growth will be 15%-20% YoY. — 15%-20%, FY27
• FY27 consolidated EBITDA margin is expected to be in the 13%-14% range. — 13%-14%, FY27
• The medium-term outlook for blended EBITDA margin remains 13%-15%, and the company will stick to that band for now. — 13%-15%, FY27
• The order book will remain above 4x revenue; management is confident of maintaining that multiple. — >4x
• Net working capital days will stay in the 100-110 days range. — 100-110 days
• The endeavor is to have at least 10-20% of revenue coming from EP (design-build) projects over time. — 10%-20%
• The objective is to take the industrial order mix to around 20%-25% of the total order book over time. — 20%-25%

Key themes

International expansion, record order book, and margin discipline

How the narrative shifted

• GCC market breakout with Kuwait and UAE entries: Management positions the Kuwait and UAE project wins as a strategic platform expansion in the GCC, building on a four-decade track record to capture multi-billion dollar water security spending.
• Record order book driving multi-year revenue visibility: The historic ₹19,400 Cr order book, over 4x revenue, provides strong execution visibility and underpins 15-20% revenue growth guidance.
• Margin resilience amid EPC-heavy mix and geopolitical pressures: Management acknowledges near-term EBITDA margin at 13-14% due to EPC-heavy mix and provisioning, but expects gradual improvement via scale and shift toward EP/O&M.
• Geopolitical noise but no material impact on execution: Despite war in the region, management claims projects are insulated, contracts include force majeure protections, and execution continues unaffected.
• Asset-light, technology-led model as competitive moat: The company emphasizes its 125 IP rights, captive use of technologies like flat valves, and 'European quality at Indian prices' cost advantage to win complex projects.
• Early moves into future industries (semiconductor, data centers, green hydrogen): Management sees a decadal opportunity in ultrapure water for semiconductors/data centers and desal for green hydrogen, but expects only gradual order inflows over 3-5 years.

Operational commentary

• Secured landmark 60 MIGD SWRO desalination project in Kuwait, marking entry into the country in partnership with HEISCO.
• Awarded 60 MLD Ajman STP (UAE) as a sewage biorefinery integrating sludge management, gas handling and power generation, strengthening UAE presence.
• Won advanced-technology drinking water project in Vienna, reinforcing European capabilities and technology-led differentiation.
• Booked repeat municipal orders in Bengaluru (BWSSB Byramangala and Bellandur) and Delhi (DJB Mitraon), strengthening India municipal portfolio.
• Perur desalination project in Chennai achieved 1 lakh cubic meters of concreting (highest ever on a single project) and is ~75% complete, moving toward commissioning in coming quarters.
• Ras Tanura Industrial WWTP (Saudi Arabia) entered decommissioning phase; Al Haer IWP progressing with engineering and procurement largely complete.
• O&M portfolio delivered strong performance: BAPCO met effluent standards with zero LTI, Duqm SWRO completed nearly two years, Qatar project received five-star safety certification, Zambia biogas-solar project advanced.
• Order backlog at all-time high of ₹19,400 Cr (4x revenue), with 66% EPC/34% O&M, balanced India/international; framework orders prudently removed to reflect only effective orders.
• Net cash positive for 14th consecutive quarter at ₹965 Cr (ex-HAM); net working capital days improved to 108 days; ROCE at 19.6%, ROE at 16%.

Analyst Q&A

• Q. Gross margin correction YoY and elevated other expenses — are they due to raw material hikes or any one-offs?

  Gross margins depend on project mix (EP vs EPC); this quarter had a higher EPC mix vs last year. Other expenses include increased provisions as per stricter internal policies for delays/defaults, which may reverse on collection. Nothing abnormal.

• Q. Operational margins excluding forex gains fell from 15.8% in Q1 FY26 to 8.9% in Q1 FY27; how should we view margins going forward?

  Forex gains are fully operational because over 52% revenue is international; accounting standards require separate line but they are working-capital-driven. Management insists margins should be viewed including forex, and on that basis EBITDA margin is over 13%, up YoY. No adjusted margin guidance provided.

• Q. What quantum of revenue has been recognized on the Perur Chennai desalination project so far?

  I don't have the exact number; our IR team will revert with the percentage.

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