VA Tech Wabag (WABAG) Q1 24/25 earnings summary

Executive summary

• Celebrated 100 years of operations, recognized as a global leader in water and desalination with a strong focus on innovation, sustainability, and ESG initiatives, operating in over 25 countries.

• Consolidated revenue for Q1 FY25 reached Rs. 6,265 million, a 13% year-over-year increase, with EBITDA up 23% and PAT up 31% (excluding one-time gain from divestment of subsidiaries).

• Order book stands robust at over Rs. 107 billion, including framework contracts and preferred bidder status, providing strong revenue visibility.

• Strategic focus on emerging markets, reduced European exposure, and increased bids in Middle East, Africa, and Southeast Asia.

• O&M business prioritized for stability, higher margins, and cash flow visibility.

Financial highlights

• Consolidated revenue from operations rose 13% year-over-year to Rs. 6,265 million; standalone revenue up 7.2% to Rs. 5,459 million.

• Consolidated EBITDA increased 23% year-over-year to Rs. 813 million; standalone EBITDA up 22% to Rs. 790 million.

• Operating margin at 13% (EBITDA level); PAT at Rs. 550 million, up 31% year-over-year, adjusted for one-time subsidiary divestment gain.

• Standalone EBITDA margin at 14.5%; PAT margin at 9.2%.

• Earnings per share (basic, consolidated) for the quarter was Rs. 8.84, compared to Rs. 8.04 in Q1 FY24.

Outlook and guidance

• Maintains 15%-20% top-line growth guidance for the current fiscal year.

• Expects to double revenues and improve margins within the next four to five years, leveraging a strong order backlog.

• Preferred bidder status in marquee projects worth over Rs. 60 billion in MEA and India, expected to convert within the fiscal year.

• Medium-term EBITDA margin outlook remains at 13%-15%.

• Management optimistic about securing large international projects and maintaining growth momentum.