Published: 25th July 2024
By: Value Research
India is grappling with a water scarcity crisis and water treatment giant VA Tech Wabag is hugely benefiting from it as the market leader.
The EPC company primarily gets orders from government entities. Its stock soared over 2 times in the last one year after being stagnant for a decade. What changed?
Its operational changes in recent years have improved financials. It is shifting focus away from core construction to high-margin, asset-light segments like engineering & procurement (EP).
With an order book worth Rs 11,400 crore, it expects 15-20% annual revenue growth, driven by its EP business. Note that in the last decade, its revenue grew only 2% per annum.
The improved margins and lowering of debt are favourable. But there are long-standing risks like high receivables and more. Given the stock rally, is there enough margin of safety then? Find out from the link below.