Analysts Remain Bullish on VA Tech Wabag Despite Portfolio Stock Dip
Despite the recent decline in shares of VA Tech Wabag Ltd., a company included in the portfolio of renowned investor Rakesh Jhunjhunwala, market buzz around the stock persists. On Tuesday, the stock closed at ₹1,480.00, down 5.40%. While trading 23% below its 52-week high, analysts maintain a positive outlook, viewing it as a b long-term investment opportunity.
104% Return Last Year
Despite the recent dip, VA Tech Wabag delivered a 104% return over the past year, significantly outperforming the Nifty 50's 7% return. This highlights the stock's superior performance compared to the broader market, leading analysts to anticipate a potential rebound.
Strong Technical Indicators
VA Tech Wabag is trading above its 200-DMA (Daily Moving Average), which acts as a b support zone at ₹1,375. Its primary resistance level lies around ₹1,650.
Nilesh Jain, Head of Technical and Derivative Research at Centrum Broking, advises investors to accumulate the stock as a potential bet, anticipating future strength despite current market volatility.
Growth Expected from International Partnerships
Analysts believe VA Tech Wabag's potential upswing isn't solely dependent on technical factors; new business triggers could further accelerate its growth.
According to Aniket Jain, an analyst at Yes Securities, the company's planned partnership with international investors for up to $100 million in investments in the municipal water sector is a positive sign.
This investment is expected to expand the company's order book, enabling it to bid for larger projects without financial constraints.
Yes Securities Maintains Buy Rating with ₹1,750 Target Price
Yes Securities has reaffirmed its 'buy' rating for VA Tech Wabag, projecting a target price of ₹1,750.
This valuation is based on FY27 EV/EBIT multiple (16x) and PE multiple (24x), indicating b growth prospects for the coming years.
Consistent Improvement in Financial Performance
According to Yes Securities, VA Tech Wabag's net profit could reach ₹290 crore in FY25, a 16% increase from ₹250 crore in FY24.
Furthermore, the company's revenue is projected to grow by 11%, increasing from ₹2,827 crore in FY24 to ₹3,127 crore in FY25.
Increased Profitability in Q3, 12% YoY Growth
VA Tech Wabag reported a 12% year-on-year increase in consolidated profit after tax (PAT) during the third quarter (October-December) of FY25.
Net profit rose from ₹63 crore in the same period last year to ₹70 crore. Revenue also increased by 17%, reaching ₹825.8 crore.
