Motilal Oswal has reiterated a buy rating on VA Tech Wabag (VATW) with a target price of ₹2,529, citing strong fundamentals and growth prospects in the water and wastewater treatment sector. The brokerage firm's latest note dated October 12, 2026, indicates upside potential of up to 30% for the stock. All 13 analysts covering VA Tech Wabag have buy recommendations on the stock, reflecting broad consensus among market experts.
VA Tech Wabag has demonstrated strong order execution capabilities with regular order inflows of ₹34.3 billion added in Q1 and continued momentum over the past six months. The company recently secured significant orders including a ₹250 crore repeat order from Reliance Industries in Jamnagar for EPT work, and entered new international markets by bagging orders worth ₹100 crore in Kuwait and ₹600 crore in UAE. In India, the company strengthened relationships with BWSSB and DJB via new order wins, while securing a project in Austria from Donauinsel Water Works. Overseas projects now contribute 50% of the company's revenue and higher share of the order book, with the Chennai desalination project steadily moving towards competition.
After delivering a CAGR of 7%/17%/28% in revenue/EBITDA/APAT over FY21-26, the company is projected to achieve a CAGR of 19%/26%/23% over FY26-28. According to Motilal Oswal's analysis, strong free cash flow generation, net cash position of ₹1,000 crore, and improving return ratios with pre-tax RoCE/RoIC of 23%/36% in FY28E make VATW attractive at approximately 21x FY28E P/E valuation. The West Asia region and other overseas projects are better positioned in terms of working capital cycles and cash flow generation compared to Indian projects.
VA Tech Wabag remains well-positioned for sustained growth with current order book of approximately ₹200 billion (~5x FY26 revenue) providing visibility into ~20% revenue growth over the next 3-4 years. The company's focus remains on profitable growth and overseas markets expansion, with intensified focus on executing large-scale projects in high-margin segments such as EP, industrial and operational and maintenance. Given the critical and non-discretionary nature of desalination plants, business continuity is expected to remain intact. The stock has gained 50% so far this year, though it remains 15% away from its record high of ₹2,319 achieved on September 15, 2026.
