VA Tech Wabag Q1 Review - Commodity Price Increase Impact Margins: ICICI Securities
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ICICI Securities Report
VA Tech Wabag Ltd.’s Q1 FY22 revenue at Rs 6.6 billion was in-line with expectations.
However, due to increase in commodity prices, Ebitda margin was down 170 basis points YoY to 5%.
VA Tech Wabag has succeeded in financial closure of two hybrid annuity model projects, which will commence execution going forward.
Chennai 400 million litres per day desalination project ordering activity has commenced and prequalification bids are complete with new state government in charge.
Strong orderbook of Rs 104 billion (3.4 times trailing twelve months sales) lends visibility; however, 30% orderbook is operation and maintenance, which restricts near-term growth.
Factoring in healthy order intake and growth outlook, we marginally raise FY22E and FY23E earnings by 3.2% and 1.8%, respectively.
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