Target: ₹1,750
CMP: ₹1,486.50
Va Tech Wabag (VATW) announced has entered a non-binding equity partnership with international investors to jointly invest up to $100 million in a dedicated platform “Municipal Platform”, that will focus on the development of capital projects in the municipal water sector. The platform provides opportunities of $1 billion over the next 3-5 years; the initial focus will be on projects in India, followed by South-East Asia and selectively in Africa.
India is currently seeing more projects on PPP basis with projects like Namami Gange, Yamuna cleaning and some state led projects being launched on HAM or BOT model. The platform will allow VATW to expand its order book, allowing it to bid for larger, capital-intensive projects without financial constraints, while maintaining an asset light strategy.
The platform will be established in collaboration with an investor consortium consisting of Norfund (Norwegian government’s investment fund) and two other international investors. VATW will be a minority partner with equity investment of not more than 26 per cent funded through internal accruals. The company will act as a technical partner.
We reiterate “Buy” rating with TP of ₹1,750 based on FY27 EV/EBIT multiple of 16x or FY27 PE multiple of 24x. The multiple reflects strengthening financials revenue growth in FY26/27, improving margins and FCF generation).
