Shares of VA Tech Wabag have gone up close to 50% in the last four months, but analysts at ICICI Securities see this Rekha Jhunjhunwala portfolio stock going further up.

The VA Tech Wabag Analyst: The Mohit Kumar-led analyst team at ICICI Securities maintained their ‘buy’ rating for the stock with a price target of ₹612, indicating a 20% upside from the stock’s last closing price of ₹508.50.

The VA Tech Wabag Thesis: The analyst in their note released today, said that the company is looking to drive growth by focusing on low competitive intensity segments like desalination and water reuse segments. The analysts also highlighted the company’s current book-to-bill ratio of 4x FY23 revenues (the highest in its history) is a positive.

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The brokerage firm further added that as 50% of the ₹1,200 crore order book is from overseas projects, it expects margins to improve, supported by the recent reduction in commodity prices. The firm also pointed out that the water treatment company has the largest market share in building and operating desalination plants in the country.

The brokerage firm raised its estimate for the company’s revenue, EBITDA, and profits for FY24 by 13%, 39% and 55% respectively.

Price Action: At the time of writing on Tuesday, VA Tech Wabag’s share price was up 0.02% to trade at ₹508.60.

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