WABAG Q1 FY27: Record order book, global momentum, and a 14-quarter net cash streak

VA Tech Wabag began FY27 with a quarter that combined growth, profitability and a sharp jump in order visibility. Consolidated revenue from operations rose to INR 887 crore in Q1 FY27, up 20.8% year on year. EBITDA came in at INR 116 crore with a stable margin of 13.1%, and PAT increased to INR 90 crore, up 36.9% year on year.

The quarter also pushed two long-running themes further. First, WABAG’s growing international mix. Management stated 52% of Q1 revenue came from overseas markets, with 48% from India. Second, a balance-sheet stance that has become a key part of the company’s investor narrative. Net cash excluding HAM stood at INR 965 crore, extending net cash positivity to the 14th consecutive quarter.

What changed this quarter: order wins and market expansion

The most notable operational development in Q1 FY27 was the scale and geography of new order wins. WABAG reported order intake of INR 3,431 crore in the quarter, with 77% from overseas and 23% from India. Management highlighted several marquee wins that signal a deliberate push deeper into the GCC and select European markets.

The company entered Kuwait with a 60 MIGD SWRO desalination project awarded by the Ministry of Electricity, Water and Renewable Energy, described as a mega order. It also entered the UAE market through the third phase of the 60 MLD Ajman Sewage Treatment Plant. In Europe, WABAG announced a large project win in Vienna, Austria for the expansion of the Donauinsel Water Works. In India, it strengthened repeat relationships with BWSSB in Bengaluru and DJB in Delhi.

Management repeatedly emphasized that these wins were not the result of aggressive bidding for volume. The stated approach remains selective, with focus on complex technology jobs, contractual risk assessment and payment security. The company also disclosed it has prudently removed about INR 600 crore of framework orders from the reported order book since those were awaiting effectiveness.

Financial performance: growth with steady margins

While revenue and PAT growth were strong, management positioned the quarter as one more data point in a multi-year profitability plan. The investor presentation reiterated a medium-term EBITDA margin band of 13% to 15%, and Q1 FY27 landed at 13.1% on a consolidated basis.

An important line item this quarter was forex. The consolidated P&L showed a forex gain, and management was clear that this should be treated as operational rather than non-core. The argument was simple: as international revenue increases, transactional forex gains and losses will appear more often because they are linked to invoices and payments, not speculative positions. They also stated they have a natural hedge due to imports and use financing structures such as PCFC for residual gaps.

Beyond profitability, the quarter continued to show capital discipline. Net working capital days were reported at 108. Return on equity was 16% and ROCE was 19.6%, reflecting the company’s continued emphasis on an asset-light model.

Revenue mix: EPC dominates, O&M remains a strategic lever

The company’s Q1 FY27 revenue split shows the current structure of the business clearly. EPC contributed 82% of quarterly revenue and O&M contributed 18%. Customer-wise, municipal revenue remained the larger share at 75%, with industrial at 25%. Geography was nearly balanced with India at 48% and overseas at 52%.

This matters because management continues to highlight O&M as a core strategic lever. On the call, WABAG described O&M as predictable, asset-light, margin-accretive and cash-accretive. However, they also cautioned that O&M does not scale in a straight line. Growth depends on commissioning and completion cycles, so it should be assessed over a two to three year horizon rather than a single quarter.

Management also discussed the longer run goal of raising O&M to about 20% of total revenues, consistent with the medium-term outlook slide.

Order book: record visibility, but with stated quality filters

WABAG reported a closing order backlog of INR 19,394 crore at the end of Q1 FY27, up 33% year on year. The backlog split was described as 66% EPC and 34% O&M. Municipal dominated the backlog at 88% with industrial at 12%. India and overseas were close to evenly split in backlog value.

The company also disclosed the key projects within the order backlog, including mega desalination orders in KSA (Yanbu), Kuwait, and India (Perur Chennai), plus major wastewater and industrial packages.

During the call, management clarified how investors should read the execution runway. O&M backlog is inherently long-duration, with contracts spanning 5 to 20 years. EPC projects in international markets typically run 24 to 30 months, while India is often around 36 months, depending on contract conditions and readiness.

This guidance was framed not as a precise annual execution schedule, but as an indication of how the book converts over time.

Execution and project updates: Perur milestone and broader portfolio

WABAG’s execution commentary focused on maintaining discipline across a diversified set of projects. One of the key highlights was Perur desalination project progress in Chennai, funded by JICA. Management stated the project crossed 1 lakh cubic meters of concreting completed, noted as the highest in WABAG’s history for a single project. They also stated critical marine works are already completed and the project is progressing steadily toward completion.

In the Middle East, the company provided updates on projects including Ras Tanura industrial wastewater treatment, which has entered a decommissioning phase after equipment delivery and installation. Al Haer wastewater treatment project was described as progressing with engineering and procurement largely complete and installation underway.

On the O&M side, management cited consistent operational performance at BAPCO, including meeting effluent standards, reducing energy consumption, achieving zero lost time injuries and uninterrupted operations even during force majeure conditions.

Strategy for future growth: widening the addressable market

The investor presentation devoted a section to future-facing initiatives. These included:

PV solar, semiconductors, data centers and green hydrogen: WABAG positioned itself as a complete water solution provider from raw water treatment to ultra pure water and ETP/ZLD with long-term O&M. The company stated it has already secured a mega desalination order from the PV solar sector and a breakthrough order to deliver UPW, ETP and ZLD for a solar cell manufacturing facility.

Biogas to CBG: WABAG disclosed a strategic tie-up with Peak Sustainability Ventures to establish 100 CBG plants, collaboration with a technology provider for Bio-CNG projects, and a Bio-Gas upgradation order on BOT basis with mobilization commenced.

Blue Seed: an initiative to invest in and support water start-ups, with the first commitment made to Bengaluru-based Nimble Vision, described as an indigenous IoT water infrastructure solutions provider.

Digitalization: AI-driven operational intelligence at Koyambedu TTRO, pilots for AI/ML based NRW reduction and AI-based operations and decision support systems, and exploration of similar digitalization across more plants in India and the Middle East.

On the concall, management set expectations that some of these newer industrial verticals require a decadal lens. They did not provide a near-term order inflow target from these segments.

Takeaways

Q1 FY27 reinforced WABAG’s positioning as a technology-led, asset-light water infrastructure player with a globalising execution mix. The quarter delivered 20.8% revenue growth and 36.9% PAT growth while maintaining EBITDA margins within the stated medium-term band. More importantly, it expanded the company’s GCC footprint with entries into Kuwait and the UAE, and pushed the order book to a record INR 19,400 crore.

Management’s messaging remained consistent: order book size matters, but quality and payment security matter more. With a 14-quarter net cash positive streak and a growing international pipeline discussed on the call, the company enters FY27 with elevated visibility and a clear focus on disciplined execution.