VA Tech WABAG Aims for 15-20% CAGR Over Next 3-5 Years with Global Expansion Strategy

Va Tech WABAG (WABAG), a leading player in the water technology sector, aims to achieve a compound annual growth rate (CAGR) of 15-20% and maintain EBITDA margins between 13-15% over the next 3-5 years, leveraging favorable growth prospects in India, the Middle East, and African markets.

The company, valued at ₹2,856 crore, boasts a robust order book of approximately ₹11,400 crore, ensuring solid revenue visibility for the next three years. WABAG expects this order book to expand to around ₹16,000 crore by the end of the current fiscal year, anticipating strong growth and a significant influx of new orders in the coming months.

WABAG is not only focusing on domestic expansion but also strategically enhancing its international footprint. During the Q4FY24 earnings call, Chairman and Managing Director Rajiv Mittal identified the Middle East, Africa, South-East Asia, and CIS countries as key regions for growth.

Mittal emphasized the Middle East's potential as a growth hub, particularly in the water sector and other industries, with countries like Saudi Arabia and the UAE driving increased orders. The region's projects benefit from substantial oil-derived funds, reducing the reliance on multilateral funding. The Saudi Arabian government has allocated $28 billion to support new wastewater projects, aiming to reuse 35% of treated wastewater by 2030. WABAG expects significant traction for new orders in the Middle East over the next 12-18 months, having submitted bids totaling $1 billion in the Gulf region, with individual projects ranging from $100 million to $200 million each. The competitive landscape is limited, with only three or four companies bidding on each project.

“These projects are in the technical evaluation stages. In the next couple of months, price bids will start to be opened and preferred bidders declared. We are confident in growing our pipeline,” said S Skandaprasad, Chief Financial Officer of Va Tech WABAG.

HBL