VA TECH WABAG: Riding the Wave of Sustainable Growth in H1 FY26

VA TECH WABAG LIMITED, a global leader in water solutions, has delivered a robust performance in the first half of fiscal year 2026, underscoring its strategic focus on profitable growth, strong cash flows, and a resilient order book. The company's consolidated revenue for H1 FY26 climbed to INR 1,568.5 crore, marking an impressive 18.2% year-on-year increase. This top-line growth was complemented by a healthy EBITDA of INR 216.1 crore, with margins of 13.8%, aligning well with management's guided range of 13-15%. Profit After Tax (PAT) also saw a significant jump, growing 19.9% year-on-year to INR 150.6 crore, maintaining a strong PAT margin of 9.6%.

This stellar performance is attributed to disciplined financial management, efficient resource utilization, and an unwavering focus on quality project execution, particularly in industrial and international projects. The company's O&M business continues to be a strong contributor, providing stable and predictable cash flows. A key highlight remains WABAG's net cash positive position for the 11th consecutive quarter, reflecting its prudent financial stewardship and effective working capital management. This consistent liquidity and debt reduction have transformed the company's net interest cost into a net interest income scenario.

Financial Highlights: A Snapshot of Performance

(Note: All figures are consolidated and converted to Crore from Million for consistency.)

Strategic Expansion into Future Energy Solutions

WABAG's strategic foray into the 'Future Energy Solutions' sector is a significant growth driver. The company has secured breakthrough orders in this segment, including an Ultra-Pure Water (UPW), Effluent Treatment Plant (ETP), and Zero Liquid Discharge (ZLD) solution for a PV Solar Manufacturing facility, and a Compressed Bio-Gas (CBG) plant in Uttar Pradesh. These initiatives align with WABAG's commitment to sustainability and India's carbon reduction goals.

The solar sector, in particular, presents a massive opportunity. With India targeting 130 gigawatts of solar cell manufacturing by 2030, the demand for UPW is expected to surge, creating a market estimated at INR 3,500 crore for WABAG's specialized solutions. Similarly, the CBG segment, supported by government incentives under the SATAT scheme, offers consistent demand and stable revenue streams by converting municipal waste into clean energy.

Robust Order Book and Global Footprint

The company's order book continues to expand, standing at a robust INR 16,019.9 crore as of H1 FY26, representing a 9.7% year-on-year growth. This healthy backlog provides strong revenue visibility and deepens client relationships. International projects contribute nearly 50% to the order book, reinforcing WABAG's global leadership in water technology across 25+ countries, including key regions in Europe, MEA, and Southeast Asia.

Management also highlighted being a preferred bidder for marquee projects worth over INR 3,000 crore, signaling a strong pipeline for future order intake. The company's asset-light model, coupled with its strong R&D and IP portfolio, positions it well to capitalize on these opportunities while delivering strong returns on capital employed (ROCE of 18.4%) and equity (ROE of 14.9%).

Segmental Performance and Geographic Reach

WABAG's revenue breakup for H1 FY26 shows that Engineering, Procurement, and Construction (EPC) projects account for 81% of the revenue, totaling INR 1,257.0 crore, while Operation & Maintenance (O&M) contracts contribute 19%, or INR 291.9 crore. Geographically, India contributed 53% of the revenue (INR 820.9 crore), with overseas markets accounting for 47% (INR 728.0 crore), showcasing a balanced and diversified revenue base.

Outlook and Investor Confidence

VA TECH WABAG remains steadfast in its strategy to expand into new markets, adopt advanced technologies, maintain financial discipline, and drive sustainable growth. The management's commitment to an asset-light model and focus on high-margin businesses is expected to sustain its growth momentum and create enduring value for all stakeholders. The company's consistent performance, strategic initiatives, and robust financial health continue to instill confidence among investors, positioning WABAG as a key player in the evolving global water and energy solutions landscape.