Multibagger stock: VA Tech Wabag tanks 23% in 2025, up 100% in 2 years; still a buy?
VA Tech Wabag: MOFSL noted that the ultra-pure water segment is emerging as a key growth driver and is expected to represent a Rs 3,500 crore opportunity for the company.
- Dec 31, 2025,
- Updated Dec 31, 2025 8:22 AM IST
Shares of VA Tech Wabag fell 23 per cent in 2025. Despite this decline, the multibagger stock is up 102 per cent over a two-year period, 287 per cent over three years and 529.74 per cent over five years. MOFSL on Wednesday reiterated its 'Buy' rating on VA Tech Wabag with a target price of Rs 1,900, valuing the stock at 26 times FY27E earnings, which is around one standard deviation above its historical multiple, supported by an improving growth and margin outlook. The scrip closed at Rs 1,270.50 apiece on Tuesday.
MOFSL remained constructive on VA Tech Wabag’s prospects, citing regular order inflows and a strong book-to-bill ratio of around 4.6 times. In December 2025, the company secured a large repeat order worth up to Rs 700 crore from the Saudi Water Authority for a technologically advanced 50 MLD BWRO plant at Aljouf, Saudi Arabia. It was also declared the preferred bidder by the Saudi Water Partnership Company for the Hadda Independent Sewage Treatment Plant project. Earlier, in November 2025, VA Tech Wabag had secured a repeat order from the Melamchi Water Supply Development Board, Nepal, for the design, build and operate of the 255 MLD Sundarijal Water Treatment Plant in Kathmandu Valley, funded by the Asian Development Bank.
MOFSL noted that the ultra-pure water segment is emerging as a key growth driver and is expected to represent a Rs 3,500 crore opportunity for the company.
The brokerage highlighted that VA Tech Wabag’s order book stood at over Rs 16,000 crore, translating into around 4.6 times trailing twelve-month revenue. In addition, preferred-bidder status for projects worth around Rs 3,000 crore and a strong bid pipeline of Rs 15,000–20,000 crore, with an estimated win rate of about 30 per cent, provided revenue growth visibility of 15–20 per cent over the next three to four years.
While the current order book is skewed towards EPC projects with relatively lower margins, MOFSL said the company continued to focus on profitable growth by selectively bidding for high-margin EPC and O&M projects across India, the Middle East, Africa and CIS countries, while leveraging its technology capabilities and partnerships with local entities.
MOFSL said VA Tech Wabag was tracking well within its guided adjusted Ebitda margin range of 13–15 per cent, with margins of around 13 per cent reported in the first half of FY26. The company maintained a net-cash position of Rs 560 crore at the end of the first half, which increased to Rs 670 crore excluding HAM projects. Key margin levers included execution of large projects such as the Rs 2,560 crore 400 MLD Chennai desalination plant, the Rs 2,100 crore 300 MLD Yanbu desalination plant and the Rs 1,420 crore Al Haer ISTP project in Saudi Arabia, along with a higher share of orders from engineering, procurement, O&M, industrial and overseas segments. MOFSL also pointed out that bad-debt provisioning expenses had declined materially over the past six to eight years due to selective bidding in projects backed by sovereign funds or multilateral agencies.
After delivering a CAGR of 4 per cent, 18 per cent and 28 per cent in revenue, Ebitda and PAT, respectively, over FY21–25, MOFSL estimated VA Tech Wabag to deliver a CAGR of 17 per cent, 22 per cent and 23 per cent over FY25–28. The brokerage said strong free cash flow generation, a sustained net-cash position and improving return ratios made the stock attractive at around 17 times FY27E and 14 times FY28E earnings, underpinning its reiterated 'Buy' call.
Shares of VA Tech Wabag fell 23 per cent in 2025. Despite this decline, the multibagger stock is up 102 per cent over a two-year period, 287 per cent over three years and 529.74 per cent over five years. MOFSL on Wednesday reiterated its 'Buy' rating on VA Tech Wabag with a target price of Rs 1,900, valuing the stock at 26 times FY27E earnings, which is around one standard deviation above its historical multiple, supported by an improving growth and margin outlook. The scrip closed at Rs 1,270.50 apiece on Tuesday.
MOFSL remained constructive on VA Tech Wabag’s prospects, citing regular order inflows and a strong book-to-bill ratio of around 4.6 times. In December 2025, the company secured a large repeat order worth up to Rs 700 crore from the Saudi Water Authority for a technologically advanced 50 MLD BWRO plant at Aljouf, Saudi Arabia. It was also declared the preferred bidder by the Saudi Water Partnership Company for the Hadda Independent Sewage Treatment Plant project. Earlier, in November 2025, VA Tech Wabag had secured a repeat order from the Melamchi Water Supply Development Board, Nepal, for the design, build and operate of the 255 MLD Sundarijal Water Treatment Plant in Kathmandu Valley, funded by the Asian Development Bank.
MOFSL noted that the ultra-pure water segment is emerging as a key growth driver and is expected to represent a Rs 3,500 crore opportunity for the company.
The brokerage highlighted that VA Tech Wabag’s order book stood at over Rs 16,000 crore, translating into around 4.6 times trailing twelve-month revenue. In addition, preferred-bidder status for projects worth around Rs 3,000 crore and a strong bid pipeline of Rs 15,000–20,000 crore, with an estimated win rate of about 30 per cent, provided revenue growth visibility of 15–20 per cent over the next three to four years.
While the current order book is skewed towards EPC projects with relatively lower margins, MOFSL said the company continued to focus on profitable growth by selectively bidding for high-margin EPC and O&M projects across India, the Middle East, Africa and CIS countries, while leveraging its technology capabilities and partnerships with local entities.
MOFSL said VA Tech Wabag was tracking well within its guided adjusted Ebitda margin range of 13–15 per cent, with margins of around 13 per cent reported in the first half of FY26. The company maintained a net-cash position of Rs 560 crore at the end of the first half, which increased to Rs 670 crore excluding HAM projects. Key margin levers included execution of large projects such as the Rs 2,560 crore 400 MLD Chennai desalination plant, the Rs 2,100 crore 300 MLD Yanbu desalination plant and the Rs 1,420 crore Al Haer ISTP project in Saudi Arabia, along with a higher share of orders from engineering, procurement, O&M, industrial and overseas segments. MOFSL also pointed out that bad-debt provisioning expenses had declined materially over the past six to eight years due to selective bidding in projects backed by sovereign funds or multilateral agencies.
After delivering a CAGR of 4 per cent, 18 per cent and 28 per cent in revenue, Ebitda and PAT, respectively, over FY21–25, MOFSL estimated VA Tech Wabag to deliver a CAGR of 17 per cent, 22 per cent and 23 per cent over FY25–28. The brokerage said strong free cash flow generation, a sustained net-cash position and improving return ratios made the stock attractive at around 17 times FY27E and 14 times FY28E earnings, underpinning its reiterated 'Buy' call.