Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessStocks

Buy VA Tech Wabag; target of Rs 781: SPA Research

SPA Research is bullish on VA Tech Wabag has recommended buy rating on the stock with a target price of Rs 781 in its research report dated June 02, 2016.

June 02, 2016 / 07:11 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

SPA Research's research report on VA Tech Wabag

VA Tech Wabag reported below than expected profitability numbers owing to muted execution in key overseas projects. Consolidated revenues declined by 5.5% YoY led by 12.3% YoY softening in overseas revenue as it declined to INR 2966 mn. Margins however improved by 103 bps YoY to 13.6%. Long term story in Wabag continues to remain intact with rising focus on clean water for drinking as well as better effluent treatment. We incorporate FY18 numbers and retain our BUY rating on the stock with a target of 781.
WABAG with presence across the value chain of water spectrum is the best play on water scarcity theme. Superior return ratios (RoCE of +19%), cash rich balance sheet, asset light business model and technological & locational advantage places it above its peers. Long term opportunity remains immense in Wabag as upcoming opportunities of over INR 700bn, alone would more than double its order backlog, even if Wabag maintains a strike rate of mere 10%. We incorporate FY18 numbers and retain our BUY rating on the stock with a target of 781 based on 22x FY18E earnings.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

first published: Jun 2, 2016 07:11 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347