Va Tech Wabag Q2 FY27 Results (NSE: WABAG)
Signal: Steady quarter
The read
The trajectory improved in Q2FY27 as revenue accelerated to ₹10,002 million (+19.9% YoY) and gross margin expanded 620bps to 28.3%, while the ₹202 billion order book and ₹52 billion H1 order intake extend visibility; however, employee cost rose 30.3% and other expenses 159.9%, and quarterly EBITDA margin is not disclosed, so conversion of the gross-margin tailwind remains the key watchpoint.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,000.2 Cr | +19.9% | +12.8% |
| Net profit | ₹104.5 Cr | +23.2% | |
| EPS | ₹16.77 | +23.0% |
P&L walk
Consolidated revenue rose to ₹10,002 million (+19.9% YoY, +12.8% QoQ), while gross margin expanded to 28.3% from 22.6% and PAT rose to ₹1,045 million (+23.2% YoY); employee cost and other expenses increased faster than revenue, so the filing does not disclose a quarterly EBITDA margin to confirm operating-margin conversion.
Segments
Rest of the world drove the consolidated acceleration: revenue rose to ₹5,444 million (+26.2% YoY) and segment result to ₹1,719 million (+51.9%), versus India revenue of ₹4,545 million (+12.4%) and result of ₹1,060 million (+51.4%).
Key positives
- Consolidated revenue reached ₹10,002 million, up 19.9% YoY and 12.8% QoQ, accelerating from Q1FY27 growth of 20.8% on a half-year basis while maintaining near-20% growth.
- Gross margin expanded 620bps YoY to 28.3% as cost of sales and services declined to 71.7% of revenue from 77.4%; the filing does not disclose the driver.
- Rest-of-world revenue rose 26.2% YoY to ₹5,444 million and segment result rose 51.9% to ₹1,719 million, making international operations the larger growth contributor.
- H1 order intake of ₹52 billion lifted the order book past ₹202 billion, providing stated revenue visibility across desalination, municipal and industrial water projects.
- H1 operating cash flow was ₹2,246 million versus negative ₹486 million YoY, while management reported a ₹11,442 million net cash position excluding HAM.
Key concerns
- Employee benefits expense rose 30.3% YoY to ₹985 million against 19.9% revenue growth, indicating personnel intensity increased faster than the top line.
- Other expenses rose 159.9% YoY to ₹603 million, which could limit conversion of the 620bps gross-margin expansion into operating profit.
- The filing does not disclose quarterly EBITDA or EBITDA margin, preventing confirmation that the gross-margin expansion translated into sustainable operating-margin improvement.
Research and educational content only. Not investment advice.