VA Tech Wabag share price targets indicate an upside of up to 31% in 12 months

VA TECH WAPAGE LIMITED Shares, after a dismal showing last year, received price targets on Tuesday indicating a potential upside of up to 31 percent. ICICI Securities maintained a ‘buy’ on the stock with a revised target of Rs 1,680, saying strong execution drove earnings momentum in Q4. JM Financial, which sees VA Tech Wabag well positioned for long-term growth, has given a higher target of Rs 1,835. In fact, MOFSL target of Rs 1,950 indicated a potential upside of 31 per cent. Post Q4 results, VA Tech Wabag stock rose 4.79 per cent to hit a high of Rs 1,522 on the BSE. Despite this, the stock fell 4.49 percent over the one-year period.

VA Tech Wabag maintained its long-term revenue growth guidance of 15-20 percent with potential to exceed it in FY27 due to strong accretion. It also maintained its EBITDA margin at 13-15 per cent.

“Bid lines remain strong across the MEA and CIS regions. Management indicated that a buyback remains under consideration alongside a higher dividend, balancing the need to conserve cash for acquisitions and future growth opportunities. We see EPS upgrades of 4 per cent each in FY27/28E driven by higher revenues,” JM Financial said.

MOFSL increased its revenue estimates by 3-4 percent. It has broadly maintained its earnings estimates on the back of lower margin expectations.

“The outlook for strong free cash flow generation, net cash position of Rs 1,000 crore, and improving yield ratios make the VAT script attractive at 17 times P/E for FY28. Hence, we reiterate our Buy rating and P/E of Rs 1,905, based on 22 times P/E for FY28,” MOFSL said.

With improving execution, good order book and promising order prospects, ICICI Securities estimated Va Tech Wabag’s revenues to grow at a CAGR of 14 per cent during FY26-28E, with an EBITDA margin of 13.5 per cent.

“The stock is trading at a valuation of 18 times FY28E. Maintain buy with revised target of Rs 1,680,” ICICI Securities said.