Synopsis: VA Tech Wabag, a multibagger stock, continues its upward momentum by reaching a record high, rising for the fifth consecutive session. The stock surged by 4.39%, reaching Rs. 1,743.85 on the BSE, and its market capitalization climbed to Rs. 10,528 crore. This growth follows a major order win worth Rs. 1,000 crore for a desalination plant from Indosol Solar Private Limited.
VA Tech Wabag, a prominent player in the water treatment industry, saw its shares rise by 4.39% to Rs. 1,743.85 on the BSE, continuing its impressive run by reaching a new record high.
The stock has been on a five-day winning streak, and its market capitalization surged to Rs. 10,528 crore.
The rally follows the company's announcement of securing a significant Rs. 1,000 crore contract for a 100 MLD Sea Water Desalination Plant from Indosol Solar Private Limited for their solar PV manufacturing facility in Andhra Pradesh.
The company's stock performance has been nothing short of stellar over the past two years, with gains of 284% in the last year and 549% over the past two years.
On Tuesday alone, 0.18 lakh shares of VA Tech Wabag changed hands, leading to a turnover of Rs. 3.12 crore on the BSE.
Order Boosts Confidence in the Stock:
VA Tech Wabag’s latest order includes the design, engineering, supply, installation, and commissioning of a 100 MLD desalination plant.
The project is expected to be completed within 38 months, followed by a 15-year operation and maintenance contract.
The desalination plant will be built using advanced technologies to ensure energy efficiency and meet the water needs of Indosol Solar's 10 GW integrated solar PV manufacturing unit.
Analysts Remain Bullish:
Market analysts remain highly optimistic about VA Tech Wabag’s future performance.
Axis Securities recently initiated coverage of the stock, giving it a "Buy" rating with a target price of Rs. 1,700 per share.
The brokerage believes that the company is poised for strong growth, citing factors such as industry tailwinds, improved profitability, and an expanding order book.
Axis Securities values the stock at 23x its FY26E EPS, higher than the current 18x.
Similarly, ICICI Securities is bullish on VA Tech Wabag and has assigned a price target of Rs. 1,541, up from the previous target of Rs. 1,445.
The brokerage highlights the company's improved balance sheet and margins over the last 24 months, as well as its significant order wins, including a Rs. 2,700 crore contract from the Middle East for a desalination plant.
Domestic brokerage Sharekhan has also revised its price target to Rs. 1,700, citing VA Tech Wabag's focus on technologically advanced projects, international expansion, and a rising share of operation and maintenance contracts, which are expected to improve margins and cash flow.
Company Overview:
VA Tech Wabag Limited is an industry leader in the water treatment sector, offering solutions that cover drinking water treatment, industrial water treatment, desalination, and wastewater treatment.
The company is involved in the design, supply, installation, and management of water treatment plants across various sectors.
The stock has a one-year beta of 1.1, indicating higher volatility compared to the broader market.
Despite this, its long-term growth potential and strong order pipeline continue to make it an attractive option for investors.
In conclusion, VA Tech Wabag’s recent order win and its track record of robust growth make it a standout performer in the water treatment sector.
With strong backing from leading brokerages and a promising order book, the stock remains well-positioned to continue its upward trajectory.
Investors should, however, be mindful of the stock's high volatility and the risks that come with such growth.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. Investors are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
