Shares of multibagger VA Tech Wabag snapped five days of gaining streak on Tuesday. The stock ended 0.53% lower at Rs 1361.70 in the previous session. During the preceding five sessions from Tuesday, the stock had risen from Rs 1,255.55 on September 2 to Rs 1,368.90 on September 9, 2024, gaining 9.02% during the period.
Rekha Jhunjhunwala, wife of late investor Rakesh Jhunjhunwala owned 50 lakh shares or 8.04% stake in the firm at the end of the June 2024 quarter.
However, the multibagger stock ended 0.53% lower to Rs 1361.70 against the previous close of Rs 1368.90 on BSE. Market cap of VA Tech Wabag fell to Rs 8,468.47 crore. The stock has gained 182.48% in a year and risen 388% in two years. It has climbed 113% this year.
A total of 0.49 lakh shares of the firm changed hands amounting to a turnover of Rs 6.70 crore on BSE. VA Tech Wabag stock has a one-year beta of 1, indicating average volatility during the period.
The stock fell to a 52 week low of Rs 436.35 on October 12, 2023 and a 52 week high of Rs 1420 on August 20, 2024.
ICICI Securities has a buy call on the stock with a price target of Rs 1,541.
The brokerage said Wabag has shed the flab, cleaned up its balance sheet and improved its margin over the last 24 months. The brokerage retained its buy call and revised its price target to Rs 1541 from against the earlier target of Rs 1,445.
"VA Tech Wabag (Wabag) bagged a mammoth order of INR 27bn (equivalent to its FY24 revenue) from the Middle East for a desalination plant – the entire order is for EPC. As a result, Wabag’s EPC order book (OB) is now close to INR 79bn or >3x book to bill ratio. Order inflow (OI) has been a concern for the last 18 months – FY24/Q1FY25 OI undershot Street’s expectations (lower than revenues). At the beginning of the fiscal, management had indicated a good bidding pipeline from Middle East. It had also pre-qualified to bid for Egyptian desalination contracts to bid up to 1000mld. Note – Middle East/Egypt have a strong pipeline of desalination contracts, " said the brokerage.
Axis Securities has initiated coverage on the stock with a 'Buy' call and a target price of Rs 1,700 per share.
The bullish stance is supported by strong industry tailwinds, improving profitability, robust order book, and expanding offerings, said the brokerage. The stock currently trades at 18 times FY26E EPS but Axis Securities values the stock at 23 times FY26E EPS.
VA Tech Wabag Limited is engaged in the water treatment field. The company's principal activities include design, supply, installation, construction and operational management of drinking water, waste water treatment, industrial water treatment and desalination plants. It provides solutions for drinking water treatment, industrial and process water treatment, water reclamation, sea and brackish water desalination, municipal waste water treatment, industrial waste water treatment and sludge treatment.