VA Tech Wabag, Enviro Infra: Buy these 2 stocks for up to 83% upside, says Systematix
The brokerage set a target price of Rs 1,840 for VA Tech Wabag, implying an upside potential of about 53 per cent, and Rs 346 for Enviro Infra Engineers, indicating an upside of up to 83 per cent.
- Jan 12, 2026,
- Updated Jan 12, 2026 11:41 AM IST
Systematix Institutional Equities on Monday said it maintained a structurally positive outlook on the water engineering, procurement and construction sector and initiated coverage on VA Tech Wabag Ltd and Enviro Infra Engineers Ltd with ‘Buy’ ratings, citing strong long-term growth opportunities across the water value chain.
The brokerage set a target price of Rs 1,840 for VA Tech Wabag, implying an upside potential of about 53 per cent, and Rs 346 for Enviro Infra Engineers, indicating an upside of up to 83 per cent.
Systematix said India’s per capita water availability had declined sharply from 5,177 cubic metres in 1951 to 1,342 cubic metres in 2000, highlighting increasing water stress. It added that the global water and wastewater treatment market was projected to expand from $295.3 billion in 2024 to $632.9 billion by 2035, creating a significant long-term opportunity.
According to Central Pollution Control Board data cited by the brokerage, only about 17 per cent of India’s total wastewater of nearly 112 billion litres per day was currently treated, indicating substantial headroom for growth. Systematix said the water value chain in India, including desalination, sewage treatment plants, reuse and recycling, remained at a nascent stage and offered multi-year growth visibility. It added that adoption of advanced technologies such as zero liquid discharge, advanced reverse osmosis systems, improved cost efficiencies and geographic diversification would be key drivers, areas where both companies had execution capabilities and technological expertise.
On VA Tech Wabag, Systematix said the company was the third-largest established global player in desalination, executing projects across more than 27 countries. It noted that the company’s order book of over Rs 16,000 crore, with an EPC to operations and maintenance mix of 62 per cent to 38 per cent, provided 3.4 times FY25 EPC revenue and 9.3 times O and M revenue visibility.
The brokerage forecast revenue, Ebitda and profit after tax compound annual growth rates of 15 per cent, 18 per cent and 21 per cent, respectively, over FY25 to FY28. It expected return on equity and return on capital employed to improve to 15 per cent and 18.3 per cent in FY28 from 13.7 per cent and 16.6 per cent in FY25. The stock was trading at 14.3 times FY28 estimated earnings, compared with an average multiple of 20 times over the past three years and 16 times over the long term, Systematix said. It added that the stock could re-rate on the back of strong industry tailwinds, a robust order book and pipeline, a diversified portfolio and execution capabilities. It flagged project execution delays, currency risk and multilateral funding risk as key risks.
On Enviro Infra Engineers, Systematix said the company, established in 2009, was a major EPC player in India’s water sector with a strong presence in wastewater treatment plants. It said the company’s revenue and Ebitda had grown at 71 per cent and 107 per cent compound annual growth rates, respectively, over the past five years.
Management had guided for 35 per cent to 40 per cent revenue compound annual growth over the next three to four years, backed by an order book of Rs 1,880 crore, equivalent to about 1.8 times FY25 revenue, the brokerage said. It added that the company was expanding into Bihar, Delhi and southern states, after executing projects in Odisha and Maharashtra, and had a bidding pipeline of Rs 8,000 crore with a historical success ratio of about 40 per cent.
Systematix said Enviro Infra had targeted adding Rs 2,500 crore to its order book in FY26, of which Rs 1,590 crore had already been secured, and was targeting more than Rs 3,500 crore of order inflows in FY27. Management had guided for Ebitda margins of 22 per cent to 24 per cent over the next few years, compared with over 28 per cent in the first half of FY26, and margins of 18 per cent to 20 per cent in the renewables segment. Renewable revenue was expected at Rs 200 crore in FY26 and Rs 500 crore in FY27.
The brokerage forecast revenue, Ebitda and profit after tax compound annual growth rates of 32 per cent, 30 per cent and 32 per cent, respectively, over FY25 to FY28, with return on equity and return on capital employed improving to 21 per cent and 25 per cent in FY28 from about 18 per cent and 21 per cent in FY25. The stock was trading at 11.4 times FY27 estimated earnings and 8.2 times FY28 estimated earnings, compared with an average one-year forward multiple of 17 times since listing in November 2024. Execution delays, rising competition and regulatory changes were cited as key risks.
Systematix Institutional Equities on Monday said it maintained a structurally positive outlook on the water engineering, procurement and construction sector and initiated coverage on VA Tech Wabag Ltd and Enviro Infra Engineers Ltd with ‘Buy’ ratings, citing strong long-term growth opportunities across the water value chain.
The brokerage set a target price of Rs 1,840 for VA Tech Wabag, implying an upside potential of about 53 per cent, and Rs 346 for Enviro Infra Engineers, indicating an upside of up to 83 per cent.
Systematix said India’s per capita water availability had declined sharply from 5,177 cubic metres in 1951 to 1,342 cubic metres in 2000, highlighting increasing water stress. It added that the global water and wastewater treatment market was projected to expand from $295.3 billion in 2024 to $632.9 billion by 2035, creating a significant long-term opportunity.
According to Central Pollution Control Board data cited by the brokerage, only about 17 per cent of India’s total wastewater of nearly 112 billion litres per day was currently treated, indicating substantial headroom for growth. Systematix said the water value chain in India, including desalination, sewage treatment plants, reuse and recycling, remained at a nascent stage and offered multi-year growth visibility. It added that adoption of advanced technologies such as zero liquid discharge, advanced reverse osmosis systems, improved cost efficiencies and geographic diversification would be key drivers, areas where both companies had execution capabilities and technological expertise.
On VA Tech Wabag, Systematix said the company was the third-largest established global player in desalination, executing projects across more than 27 countries. It noted that the company’s order book of over Rs 16,000 crore, with an EPC to operations and maintenance mix of 62 per cent to 38 per cent, provided 3.4 times FY25 EPC revenue and 9.3 times O and M revenue visibility.
The brokerage forecast revenue, Ebitda and profit after tax compound annual growth rates of 15 per cent, 18 per cent and 21 per cent, respectively, over FY25 to FY28. It expected return on equity and return on capital employed to improve to 15 per cent and 18.3 per cent in FY28 from 13.7 per cent and 16.6 per cent in FY25. The stock was trading at 14.3 times FY28 estimated earnings, compared with an average multiple of 20 times over the past three years and 16 times over the long term, Systematix said. It added that the stock could re-rate on the back of strong industry tailwinds, a robust order book and pipeline, a diversified portfolio and execution capabilities. It flagged project execution delays, currency risk and multilateral funding risk as key risks.
On Enviro Infra Engineers, Systematix said the company, established in 2009, was a major EPC player in India’s water sector with a strong presence in wastewater treatment plants. It said the company’s revenue and Ebitda had grown at 71 per cent and 107 per cent compound annual growth rates, respectively, over the past five years.
Management had guided for 35 per cent to 40 per cent revenue compound annual growth over the next three to four years, backed by an order book of Rs 1,880 crore, equivalent to about 1.8 times FY25 revenue, the brokerage said. It added that the company was expanding into Bihar, Delhi and southern states, after executing projects in Odisha and Maharashtra, and had a bidding pipeline of Rs 8,000 crore with a historical success ratio of about 40 per cent.
Systematix said Enviro Infra had targeted adding Rs 2,500 crore to its order book in FY26, of which Rs 1,590 crore had already been secured, and was targeting more than Rs 3,500 crore of order inflows in FY27. Management had guided for Ebitda margins of 22 per cent to 24 per cent over the next few years, compared with over 28 per cent in the first half of FY26, and margins of 18 per cent to 20 per cent in the renewables segment. Renewable revenue was expected at Rs 200 crore in FY26 and Rs 500 crore in FY27.
The brokerage forecast revenue, Ebitda and profit after tax compound annual growth rates of 32 per cent, 30 per cent and 32 per cent, respectively, over FY25 to FY28, with return on equity and return on capital employed improving to 21 per cent and 25 per cent in FY28 from about 18 per cent and 21 per cent in FY25. The stock was trading at 11.4 times FY27 estimated earnings and 8.2 times FY28 estimated earnings, compared with an average one-year forward multiple of 17 times since listing in November 2024. Execution delays, rising competition and regulatory changes were cited as key risks.