WABAGNSENovember 14, 2025

VA Tech Wabag Limited

9,243words
105turns
16analyst exchanges
3executives
Management on call
Rajiv Mittal
CHAIRMAN AND MANAGING DIRECTOR
Skandaprasad Seetharaman
GROUP CHIEF FINANCIAL OFFICER
Anoop Kartha
HEAD SPECIAL INITIATIVES
Key numbers — 40 extracted
20%
esource utilization and unwavering focus on quality execution. Our bottom line grew profitably by 20% year-on-year. We maintained our guided EBITDA margins and continued to deliver healthy top line g
10%
d our guided EBITDA margins and continued to deliver healthy top line growth with a PAT margin of 10%. We further strengthened our balance sheet by reducing debt and sustaining a net cash positive st
INR160 billion
r order book continued to expand with significant strategic wins. As of H1 FY '26, it stands over INR160 billion, comprising of well-balanced mix of 62% EPC and 38% O&M projects, ensuring strong revenue visibil
62%
trategic wins. As of H1 FY '26, it stands over INR160 billion, comprising of well-balanced mix of 62% EPC and 38% O&M projects, ensuring strong revenue visibility and deepening client relationship. I
38%
s. As of H1 FY '26, it stands over INR160 billion, comprising of well-balanced mix of 62% EPC and 38% O&M projects, ensuring strong revenue visibility and deepening client relationship. International
50%
isibility and deepening client relationship. International projects continue to contribute nearly 50% of the order book, driving margin improvement and reinforcing our global footprint. In addition,
INR30 billion
l footprint. In addition, WABAG has emerged as a preferred bidder for marquee projects worth over INR30 billion, which is almost INR3,000 crore, both in India and overseas. Among our key wins in this quarter
INR3,000 crore
has emerged as a preferred bidder for marquee projects worth over INR30 billion, which is almost INR3,000 crore, both in India and overseas. Among our key wins in this quarter, we bagged two breakthrough ord
5.12 million
tinued focus on long-term O&M portfolio, we also secured a repeat O&M order for 5 years valued at 5.12 million Bahraini Dinars, which is approximately INR1,181 million for 40 MLD AMAS, which is Madinat Salman
rs,
O&M portfolio, we also secured a repeat O&M order for 5 years valued at 5.12 million Bahraini Dinars, which is approximately INR1,181 million for 40 MLD AMAS, which is Madinat Salman Sewage Treatment
INR1,181 million
red a repeat O&M order for 5 years valued at 5.12 million Bahraini Dinars, which is approximately INR1,181 million for 40 MLD AMAS, which is Madinat Salman Sewage Treatment Plant in Bahrain. Let me now share a fe
130 gigawatt
s. Now with strong policy support through Make in India and the PLI schemes, India is targeting 130 gigawatt of solar cell manufacturing by 2030, which will drive demand for our 100 to 150 MLD of Ultra-Pure
Guidance — 20 items
Rajiv Mittal
opening
“Another milestone achievement is our breakthrough project for setting up of Biogas Upgradation Unit for Compressed Biogas production.”
Rajiv Mittal
opening
“The project captures and upgrades raw biogas into clean renewable CBG fuel, preventing methane emission and replacing conventional fossil fuels, an excellent demonstration of circular economy in action, turning municipal waste into clean green energy, and our contribution to India's carbon reduction goal.”
Rajiv Mittal
opening
“This project will leverage the benefits of SATAT (Sustainable Alternative Towards Affordable Transportation) scheme of Government of India, which offers a very high attractive framework for CBG producers with both commercial and strategic advantage.”
Rajiv Mittal
opening
“Plant piping, pre-fabrication activities is set to begin shortly and the project is on schedule.”
Rajiv Mittal
opening
“200 MLD Al Haer STP project in Saudi Arabia, another prestigious repeat order from Miahona is moving swiftly and all project activities are in full swing.”
Rajiv Mittal
opening
“Lusaka Sanitation Project in Zambia, funded by EIB and KfW Germany is also on track.”
Anoop Kartha
opening
“The project will convert sludge into biogas through anaerobic digestion, followed by advanced purification to produce fuel-grade methane.”
Skandaprasad S.
opening
“This top-line performance was primarily driven by timely project execution, and new and large projects picking up pace.”
Skandaprasad S.
opening
“On the profitability front, consolidated EBITDA for H1 stood at INR216 crore with a margin of 13.8%, in line with our target band of 13% to 15% EBITDA, as per the medium-term outlook.”
Skandaprasad S.
opening
“Consistent with our mantra of profitable growth, over 5 years, consolidated PAT has had a CAGR of 38% with the earnings per share more than tripling, 3.6x to be precise, reflecting strong shareholder value creation driven by execution excellence, a quality order book, growth in O&M portfolio, increased international business from marquee industrial clients and efficient cash management.”
Q&A — 16 exchanges
Q
Sir, my first question is on the gross margin impact. Is it because of the EP via-a-vis EPC proportion and that change actually led to some impact at the gross margin level?
Skandaprasad S.
Kishore, yes, you have seen that even in our mid-term guidance, we did mention about growth, and it's obviously a case of mix of projects. And you have seen, we presented last year that our EP mix in the EPC was about 1/3rd. But it's an average over a period. So it is based on mix of projects. But again, with volume, we have guided this band of 13% to 15%, within which we are firmly there. We are at 13.8% with the growth. So I don't see any impact, if at all, we are only growing the margins year-over-year. Got it, sir. A follow-up on this, actually, similar mix expected in the coming quarters
Q
Congratulations for good results. So my question is a follow-up to the previous participant. So can you provide us out of the overall order backlog of INR160 billion, INR92.1 billion stands for the EPC. Can you quickly say the mix between the EP and the EPC?
Skandaprasad S.
See, these will, of course, vary with period. I would probably put it at more 80%-20% or 85%- 15% at this point. But yes, as you would know, when new orders come, the mix keeps changing. But for us, every order is the same. We look at benchmark margins irrespective of what is the scope of the project. Okay. Understood. And the next question that I had was, in the previous call, as mentioned the Saudi NWC long-term O&M contract in those segments, we have mentioned that there is a very good business opportunity in that segment. So, can you please explain, what is the status on these O&M projects
Q
Hardik, we can't hear you. You have to come closer to the speaker and speak up because we can hardly hear you.
Hardik
Can you hear me now? Yes, better. I just wanted to ask why have other income increased materially? Sorry? Why has other income increased materially? We just said, it's basically on the forex. Rest everything is interest income and all have been standard. The main difference last quarter was forex loss and this quarter is forex gain. That is the only material change in other income. And as we explained, being an international company, global company with presence in more than 27 countries and 50% of our revenue is coming in foreign exchange. So this foreign exchange income or losses is part of
Q
Sir, my first question is on the margins. When you say margins without the other income, then we see a dip, right, from Y-o-Y as well as Q-o-Q. So what's the reason behind it? I think it's percolating due to lower gross margin as well. So what is that impact for us?
Rajiv Mittal
My friend, it's not true. If you would have concentrated on the few of the other participants who asked questions before you, all this we discussed. The only difference is the other income, which consists of forex. And if you just take the forex part, which I just explained why it is a business income or loss for us. If you take that, it is well within guided margin of 13% to 15%. There is no drop of margin and there's no drop of our operating margin or gross margin. Okay. Yes, I'll take that in off-line, Sir. Sir, also if you can give a little color on what kind of orders we have in our pipel
Q
Sir, my question is on our preferred order book, which we mentioned last year, where we were the lowest bidder in Doha's desalination plant. So sir, what's the status update on that project?
Rajiv Mittal
See, first, I would say it's not last year, it's last quarter, okay. And this is a project which is in Kuwait for the Ministry, and we are a declared L1 bidder. This is under the evaluation process. Generally, it takes about 4 to 5 months. I would say that they are in advanced stage of evaluation. Post evaluation, they will recommend to the Ministry for acceptance. And post that, they will announce the order announcement. And then I think we can inform you if that happens in the next couple of months, we are hoping for, we can make an order intake announcement. Fair enough, sir. Sir, the secon
Q
Yes, I had a couple of questions. First is about the order book turnaround time, specifically asking for the EPC orders.
Rajiv Mittal
This is, as we have said many times, generally, it's about 3 to 3.5 years depending on the size and the complexity of the project. Okay, sir. And also just to understand a bit better, is there any upper cap on the order intake that the management feels that, yes, this should be the upper cap? I think I can only tell you “Dil Maange More” that there is no upper cap. We only have a criteria for shortlisting our tenders where we like to bid. So we have a very strong screening process, which bids we should bid, which we should let go. If it has cleared that, then there is no upper cap because fina
Q
Yes. I want to draw your attention to the management comment on the last line in which you are quoted as saying we are poised to accelerate our growth trajectory. So what do you mean by the accelerate beyond that 15% to 20% that you have guided?
Rajiv Mittal
I think that is always an endeavor, Kaushik, because we have been a growing company and an aspiring company. We don't go for consolidation; we've always looked at growth. And today, the sector is offering that kind of opportunities. So our endeavor and our message to our team is always look for growth, don't stop, like the previous question, whether we are going to stop, are we going to put a cap? And the answer is no, we are not. When market is offering as long as your selection criteria is good, I think we are just going to go for it. And if all the orders which we are talking about, they co
Q
I wanted to understand more about the Ultra-Pure water opportunity. I understand Semiconductor, Solar are big areas of focus and so much of traction between both these sectors happening in India. Can you allude some light into the opportunity size that we have? And given we have industry leadership, any early wins, any indications you would like to share?
Anoop Kartha
Sure. Ranodeep, see, we are talking about a major growth in the PV Solar Manufacturing, Battery Cell Manufacturing and Semiconductor, as well as we are also seeing good potential in the emerging field of Green Hydrogen, okay. Now, we are talking about setting up around 130 gigawatt of solar cell manufacturing by 2030, and currently we are at 25 gigawatts. And that gives an opportunity to set up PV Solar Cell Manufacturing of around 105 gigawatt by 2030. And you can see that on a thumb rule basis, you can say that 1 gigawatt will require approximately 1 MLD of Ultra-Pure Water, which means that
Q
Okay. Sir, I have one question about debtors’ level, trade receivables. Like I can see that in the consolidated balance sheet, the debtor level is something like INR2,960 crore. So is this business which is very receivable intensive? Or we are looking at getting this reduced over time? Because if you see our turnover, it's almost 79% of our consolidated turnover. So what is the reason? Is this because of government contracts? Are you seeing any issues in getting recoveries?
Skandaprasad S.
See, I think there are 2 to 3 main aspects you have to see. Number one, look at debtors as current and noncurrent as a first step. Noncurrent is an inherent part of the contracted structure when we go for large projects, especially municipal projects, projects which are funded by multilaterals there is a retention clause that is there, which is payable at the COD commissioning PGTR or at the end of the defects liability period. So these are deducted from each bill and it is paid at the end. Number two, there are advances that we receive at the start of the project. Now that has to be because o
Q
So my question is that, on the USD100 million municipal platform with Norfund, what's the potential project pipeline we are looking at, like could it scale to 3x to 4x of the fund size, like say, INR3,000 crore or INR4,000 crore over time?
Rajiv Mittal
Yes, I think it should be much more than that because you know that we have a mantra in WABAG that we want to remain asset-light, which means we will never invest more than 25%. And from platform, if we invest 25% or even 50%, our share in the platform will be less than or equal to maximum 25%. You can see we can easily get 8x to 10x investments. And that is what we want to remain in this field, and we also don't want to make our balance sheet debt heavy hence the platform. So will the margins be the same like 12% to 13% or since this is municipal project so, will the blended margin then go to
Q
Sir, could you please talk about the industrial segment business opportunity in the MENA and CIS region? And in the overseas market we are largely taking desalination and STP projects. So what is the right to win the business for the industrial segment in the overseas market? And also can you please let us know the initiatives that we are taking to win these businesses?
Rajiv Mittal
Yes, you have seen this, Priya, that we, as a company have excelled in industrial projects. Probably there's no comparable company, not only in India, but globally when we talk about mega, complex, challenging industrial projects, which mainly is coming from oil and gas sector. Take an example of projects we do for Petronas, we did about 10 years back. Okay. That was successfully completed. Take a project we did in Dangote, which was recently completed. And also before, this war broke out between Russia and Ukraine, we took a project in Russia, which is again a mega oil and gas project with te
Q
Sir, as we talk like we are going for the clean water projects for different sectors like Hydro, all these Semiconductor, Data Center, all these things. So what kind of margins would that get impacted because of that? Like are we thinking of getting higher margins if we just slowly shift to those segments going forward?
Anoop Kartha
See, it will be kind of a normal margin, which we see across all the industry sectors. So it will be something similar only. Okay. And what could be the time line for execution of our order book, which is standing at INR16,000-odd crore? The EPC, as Mr. Mittal mentioned earlier, the EPC would be anywhere between 3 to 3.5 years, some of them even shorter, some of them longer depending on the size of the project and the scope of the project. And O&M would be more long term because we have 5, 7, 10, 15 and even 20-year O&M. So this would be in different phase. So average maybe 7-10 years of O&M,
Q
You had mentioned about the platform for HAM and the impending transfer of the assets which will take place. Can we get a flavour on where these marquee investors are from even if you can't reveal the name?
Rajiv Mittal
Do you have a particular country preference? No. So, the purpose being you always would have had the alternative, but you mentioned in the past that you wanted to be asset-light. So you don't want to take it on your balance sheet because the currency being there and now you have a very decent cash balance. So why going for any sort of equity dilution but that sort of option is always there or some sort of reward in the way of some traditional rights issue which Tata’s used to do. So one is curious to know whether they are large Indian investors who are really lining up and want to partner with
Q
Is this question for me?
Rajiv Mittal
Yes, Sandeep. Is it Sandeep? Operationally, your company has been doing very well. I think there is some confusion among a lot of the media as well as analyst community as to the operating margins of the company, because many of the people don't realize that what you report as other income is actually translation, which is part of the business income. And many in the media actually reported your operating margins as some 10.7% and I think that's created a lot of confusion in the minds of investors. I think you need to make the investor community in general aware of the fact that this is becaus
Q
Congratulations on a good set of numbers. My first question was some time back, the company had received a demand from the Customs department to the tune of INR87 crore. Is there any update on that, sir?
Skandaprasad S.
Yes. Tanubhav, we also disclosed in the same announcement that we will take appropriate legal or other recourse, which we are currently pursuing. Once we have an important milestone, that we expect in the next few months maybe, subject to how soon the courts or the Appellate Authority hear it, we will surely put that out. But as of now, as we have mentioned also in the announcement, we are very, very confident that this demand is not something that would stand, and there is very good chances that we will be able to argue our position and turn this over. Secondly was a question-cum-suggestion.
Q
Thank you once again. I think it was a little longish call, and appreciate your active participation in this Q2 & H1 FY '26 earnings call. The analyst presentation is available on our website. In case you have any further queries, you may get in touch with our Adfactors IR team or you can also feel free to reach out to us directly. Thank you once again, and have an enjoyable evening. Bye-bye.
Management
Speaking time
Rajiv Mittal
32
Moderator
18
Skandaprasad S.
11
Kishore Kumar
6
Anupam Goswami
5
Anoop Kartha
3
Priya
3
Hardik
3
Raghav
3
Ranodeep Sen
3
Opening remarks
Rajiv Mittal
Thank you. Good evening, ladies and gentlemen. A warm welcome to you all on the earnings call following the announcement of Q2 and H1 FY '26 results of VA Tech Wabag Limited. Your continued encouragement and trust remains invaluable to our growth journey, and we truly appreciate your presence this evening. Joining me today are Mr. Skandaprasad Seetharaman, our Group CFO; and Mr. Anoop Kartha, our Head, Special Initiatives. We are pleased to report continued profitable growth for the half year, driven by our disciplined financial management, efficient resource utilization and unwavering focus on quality execution. Our bottom line grew profitably by 20% year-on-year. We maintained our guided EBITDA margins and continued to deliver healthy top line growth with a PAT margin of 10%. We further strengthened our balance sheet by reducing debt and sustaining a net cash positive status for the 11th consecutive quarter, reflecting our prudent financial stewardship. This year, nearly half of our
Anoop Kartha
Thank you, Mr. Mittal. Good evening, everyone. I'm delighted to have this opportunity to share our business strategy for the Future Energy Solutions segment, and this encompasses Solar, Green Hydrogen, Semiconductors, Compressed Biogas, and Data Centers. This marks an exciting phase in WABAG's journey as we align our strength and expertise to serve these fast evolving high-growth sectors that are shaping a sustainable and technology-driven future. Over the past year, we have implemented several strategic initiatives that have already delivered tangible results, including two breakthrough orders to establish an integrated water and wastewater treatment facility for a PV Solar Manufacturing facility and Compressed Bio-Gas treatment system. For over a century, WABAG has partnered with global clients to deliver sustainable technology- driven water and wastewater solutions. Our proven expertise in producing demineralized and deionized water using both resin-based and advanced membrane techn
Skandaprasad S.
Thank you, Anoop. Good evening, everyone. I trust you have had the opportunity to go through our results update presentation, which is available on our website and has been filed with the stock exchanges. The first half of this fiscal year has been gratifying on multiple fronts. We continued our journey of profitable growth, with PAT growing faster than the top line and margins remaining firmly in line with our mid-term outlook, driven by enhanced execution efficiency, quality industrial and international projects and the increasing contribution from our high-margin O&M business. For H1, our consolidated revenue stood at INR1,569 crore, marking a growth of over 18% year- over-year, while standalone revenue was INR1,330 crore. This top-line performance was primarily driven by timely project execution, and new and large projects picking up pace. Our O&M business continues to perform strongly, contributing 19% to the total revenue, while international business accounted for 47% of the rev
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