VA Tech Wabag closes FY26 with 20 percent revenue growth and a 172 billion rupee order book

VA Tech Wabag ended FY26 with another year of steady, profitable growth. On a consolidated basis, revenue from operations rose 19.7 percent year on year to INR 3,944.2 crore, while EBITDA grew 21.8 percent to INR 524.1 crore. Profit after tax increased 25.5 percent to INR 370.5 crore. In Q4 FY26, revenue from operations was INR 1,414.4 crore and PAT was INR 128.3 crore, both showing strong year-on-year growth.

The company positioned the year’s performance as aligned with its medium-term guidance. It also highlighted its sixth consecutive year of maintaining a net cash positive position, with net cash of INR 950.0 crore excluding the HAM project. Management linked the improvement in profitability to operating margin expansion, disciplined execution, and debt and cash management.

A year driven by execution across EPC and O&M

FY26 revenue continued to be led by EPC, but the O&M base kept expanding. The investor presentation provided a revenue breakup showing EPC revenue of INR 3,226.0 crore and O&M revenue of INR 682.4 crore, translating to an 83 percent and 17 percent mix respectively. Municipal projects contributed the bulk of revenues at around 80 percent, while industrial contributed about 20 percent.

Geographically, the company reported a near balanced mix between India and overseas. The FY26 revenue by geography table showed India at INR 1,858.7 crore and overseas at INR 2,049.7 crore. Management expects international business, especially the Middle East and Africa cluster, to be a key growth driver over the next few years given the scale of desalination and wastewater investments in that region.

The company also maintained profitability within a narrow band. Consolidated EBITDA margin for FY26 was 13.3 percent, while PAT margin was 9.4 percent. Management reiterated its focus on growing the bottom line faster than the top line, and highlighted that this approach has been consistently demonstrated over recent years.

Order book visibility remains the core pillar

The key strategic anchor for VA Tech Wabag continues to be its backlog. The company closed FY26 with a reported order book of INR 172.3 billion. Order intake during the year was INR 74.7 billion, supported by multiple large wins including mega projects in Chennai and Saudi Arabia.

Order intake was diversified across offerings and geographies. FY26 order intake split showed EPC at INR 5,806.5 crore and O&M at INR 1,664.3 crore. By geography, India accounted for INR 3,775.0 crore and overseas for INR 3,695.8 crore.

The closing backlog mix also underlined the company’s annuity visibility. Of the INR 17,234.9 crore closing backlog, EPC accounted for INR 10,099.9 crore and O&M for INR 6,346.2 crore, with a framework component of INR 611.4 crore. Management repeatedly highlighted O&M as a cash-accretive and margin-accretive lever, given contract tenors ranging from 5 to 20 years.

Strategy themes: manufactured water, new energy adjacencies, and digital operations

Management commentary in the annual investor meet focused on structural demand drivers for the water sector. The company described water scarcity, urbanization, and industrial dependence on reliable water supply as long-term tailwinds, and also pointed to new demand areas such as semiconductors, PV solar, data centers, AI infrastructure, and green hydrogen.

In the investor presentation, the company outlined initiatives such as expanding ultra-pure water capabilities for PV solar and semiconductor customers, pursuing Bio-CNG and compressed biogas opportunities through a strategic tie up aimed at 100 CBG plants, and investing in innovation through its Blue Seed initiative.

Digitalization was positioned as a practical execution lever rather than a branding exercise. The presentation referenced AI-enabled operational intelligence at the Koyambedu TTRO plant, pilots for AI/ML based non-revenue water reduction solutions, and an AI based operations and decision support system at the AMAS plant in Bahrain.

What to watch: cash conversion, forex impact, and project lumpiness

While FY26 profitability improved, cash flow trends were mixed. Consolidated net cash generated from operations was INR 206.7 crore in FY26 versus INR 355.2 crore in FY25. Management emphasized net cash discipline, but investors may track whether operating cash flow scales in line with earnings as execution ramps up.

Forex impact remains a visible line item in results. Consolidated forex loss or gain was reported at negative INR 46.7 crore in FY26 compared with negative INR 7.9 crore in FY25, showing the sensitivity of reported numbers to currency movements.

Management also reiterated that EPC is a lumpy business, with margins and segment profitability varying depending on the project phase, especially in quarters where large projects are in heavy construction stages.

Closing thoughts

VA Tech Wabag’s FY26 performance reinforced a consistent pattern. Revenue growth stayed within the 15 to 20 percent band that management has previously communicated, profitability remained within the 13 to 15 percent EBITDA margin range, and the company continued to highlight an asset-light model supported by a net cash position.

The bigger narrative is the order book. With a closing backlog of over INR 17,000 crore and multiple mega projects added during the year, the company enters FY27 with strong visibility. Management’s focus areas remain clear: technology-led water solutions, scaling O&M toward 20 percent of revenue, expanding desalination and reuse leadership, and selectively building new energy water capabilities.