VA Tech Wabag Q4 Review - Healthy Execution, Cashflow Concern Persists: ICICI Securities
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ICICI Securities Report
VA Tech Wabag Ltd.’s Q4 FY21 performance was better than expectations, supported by pick-up in domestic execution leading to healthy operating margins.
Company has succeeded in financial closure of two hybrid annuity model projects, which will commence execution going forward.
Chennai 400 millions litre per day desalination project ordering activity has commenced and pre-qualification bids completed with new state government in charge.
Strong orderbook of Rs 95.8 billion (3.4 times trailing twelve months sales) lends visibility; however, 34% of the orderbook is operation and maintenance, which restricts near-term growth.
Supported by proceeds from preferential allotment and increase in payables, the company turned around to net cash position of Rs 436 million.
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