NSEI:WABAG

Stock Analysis Report

Executive Summary

VA Tech Wabag Limited, together with its subsidiaries, engages in the design, supply, installation, construction, and operational management of drinking water, waste and industrial water treatment, and desalination plants in India and internationally.

Snowflake

Fundamentals

Very undervalued with high growth potential.


Similar Companies

Share Price & News

How has VA Tech Wabag's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.6%

WABAG

-0.08%

IN Water Utilities

3.3%

IN Market


1 Year Return

-22.7%

WABAG

12.2%

IN Water Utilities

7.1%

IN Market

Return vs Industry: WABAG underperformed the Indian Water Utilities industry which returned 12.2% over the past year.

Return vs Market: WABAG underperformed the Indian Market which returned 7.1% over the past year.


Shareholder returns

WABAGIndustryMarket
7 Day2.6%-0.08%3.3%
30 Day-29.1%-0.5%2.9%
90 Day-35.9%-1.5%3.1%
1 Year-22.7%-22.7%15.6%12.2%9.4%7.1%
3 Year-60.7%-61.4%-12.5%-18.7%22.7%16.4%
5 Year-74.8%-75.5%12.6%1.1%44.0%30.4%

Price Volatility Vs. Market

How volatile is VA Tech Wabag's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is VA Tech Wabag undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WABAG (₹195) is trading below our estimate of fair value (₹2290.6)

Significantly Below Fair Value: WABAG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WABAG is good value based on its PE Ratio (11.3x) compared to the Water Utilities industry average (16.8x).

PE vs Market: WABAG is good value based on its PE Ratio (11.3x) compared to the Indian market (13x).


Price to Earnings Growth Ratio

PEG Ratio: WABAG is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: WABAG is good value based on its PB Ratio (1x) compared to the XA Water Utilities industry average (1.2x).


Next Steps

Future Growth

How is VA Tech Wabag forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

38.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WABAG's forecast earnings growth (38% per year) is above the savings rate (7.6%).

Earnings vs Market: WABAG's earnings (38% per year) are forecast to grow faster than the Indian market (18.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: WABAG's revenue (23.2% per year) is forecast to grow faster than the Indian market (11.3% per year).

High Growth Revenue: WABAG's revenue (23.2% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WABAG's Return on Equity is forecast to be low in 3 years time (13.3%).


Next Steps

Past Performance

How has VA Tech Wabag performed over the past 5 years?

3.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: WABAG's earnings have grown by 3.1% per year over the past 5 years.

Accelerating Growth: WABAG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: WABAG had negative earnings growth (-30.5%) over the past year, making it difficult to compare to the Water Utilities industry average (7.2%).


Return on Equity

High ROE: WABAG's Return on Equity (7%) is considered low.


Return on Assets

ROA vs Industry: WABAG's Return on Assets is below or equal to the Water Utilities industry average last year.


Return on Capital Employed

ROCE Improving: WABAG's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is VA Tech Wabag's financial position?


Financial Position Analysis

Short Term Liabilities: WABAG's short term assets (₹30.9B) exceeds its short term liabilities (₹24.2B)

Long Term Liabilities: WABAG's short term assets (30.9B) exceeds its long term liabilities (2.7B)


Debt to Equity History and Analysis

Debt Level: WABAG's debt to equity ratio (56.5%) is considered high

Reducing Debt: WABAG's debt to equity ratio has increased from 18.9% to 56.5% over the past 5 years.

Debt Coverage: WABAG's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: WABAG's interest payments on its debt are well covered by EBIT (3.9x coverage).


Balance Sheet

Inventory Level: WABAG has a low level of unsold assets or inventory.

Debt Coverage by Assets: WABAG's debt is covered by short term assets (assets are 5.038380x debt).


Next Steps

Dividend

What is VA Tech Wabag's current dividend yield, its reliability and sustainability?

2.05%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%0.6%markettop25%2.4%industryaverage3.1%forecastin3Years2.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: WABAG's dividend (2.05%) is higher than the bottom 25% of dividend payers in the Indian market (0.6%).

High Dividend: WABAG's dividend (2.05%) is low compared to the top 25% of dividend payers in the Indian market (2.42%).

Stable Dividend: Whilst dividend payments have been stable, WABAG has been paying a dividend for less than 10 years.

Growing Dividend: WABAG's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.1%), WABAG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WABAG's dividends in 3 years are forecast to be well covered by earnings (21.4% payout ratio).


Next Steps

Management

What is the CEO of VA Tech Wabag's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Rajiv Mittal (59yo)

4yrs

Tenure

₹24,749,000

Compensation

Mr. Rajiv Devaraj Mittal has been the Managing Director of Va Tech Wabag Ltd since September 27, 2000 and has been its Group Chief Executive Director simce October 1, 2015 and Head of SBU MBG. Mr. Mittal h ...


CEO Compensation Analysis

Compensation vs. Market: Rajiv's total compensation ($USD349.11K) is about average for companies of similar size in the Indian market ($USD33.77K).

Compensation vs Earnings: Rajiv's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.8yrs

Average Tenure

57yo

Average Age

Experienced Management: WABAG's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

6.0yrs

Average Tenure

57yo

Average Age

Experienced Board: WABAG's board of directors are considered experienced (6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Subramanian Varadarajan (54yo)

    Chief Growth Officer & Whole Time Director

    • Tenure: 4.3yrs
    • Compensation: ₹11.38m
  • Shivnarayan Saraf (67yo)

    Head of Operations and Executive Director of Management Board

    • Tenure: 0yrs
    • Compensation: ₹3.38m
  • Rajiv Mittal (59yo)

    Group CEO

    • Tenure: 4yrs
    • Compensation: ₹24.75m
  • Pankaj Sachdeva (56yo)

    Chief Executive Officer of India Cluster

    • Tenure: 2.9yrs
    • Compensation: ₹19.50m
  • Patrick Andrade (57yo)

    Chief Operating Officer for India Cluster

    • Tenure: 3.8yrs
  • Krishna Gokhale (63yo)

    President of International Engineering Centre

    • Tenure: 9.5yrs
    • Compensation: ₹3.65m
  • Rajneesh Chopra (56yo)

    Global Head of Business Development

    • Tenure: 3.8yrs
    • Compensation: ₹8.04m
  • R. Swaminathan

    Company Secretary & Compliance Officer

    • Tenure: 2.7yrs
    • Compensation: ₹3.58m
  • Venkatasamy V. (59yo)

    Chief Information Officer

    • Tenure: 0yrs
  • Sandeep Agrawal (48yo)

    Chief Financial Officer

    • Tenure: 0.5yrs

Board Members

  • Sumit Chandwani (52yo)

    Independent Director

    • Tenure: 8.3yrs
    • Compensation: ₹1.50m
  • Bhagwan Narang (74yo)

    Independent Chairman

    • Tenure: 10.1yrs
    • Compensation: ₹2.00m
  • Subramanian Varadarajan (54yo)

    Chief Growth Officer & Whole Time Director

    • Tenure: 4.3yrs
    • Compensation: ₹11.38m
  • Rajiv Mittal (59yo)

    Group CEO

    • Tenure: 4yrs
    • Compensation: ₹24.75m
  • Revathi Kasturi (60yo)

    Independent Director

    • Tenure: 7.7yrs
    • Compensation: ₹1.50m
  • Malay Mukherjee

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: ₹1.50m
  • Milin Mehta (55yo)

    Additional Independent Director

    • Tenure: 0.5yrs

Company Information

VA Tech Wabag Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: VA Tech Wabag Limited
  • Ticker: WABAG
  • Exchange: NSEI
  • Founded: 1995
  • Industry: Water Utilities
  • Sector: Utilities
  • Market Cap: ₹10.553b
  • Shares outstanding: 54.69m
  • Website: https://www.wabag.com

Number of Employees


Location

  • VA Tech Wabag Limited
  • WABAG House
  • No.17, 200 Feet Thoraipakkam-Pallavaram Main Road
  • Chennai
  • Tamil Nadu
  • 600117
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WABAGNSEI (National Stock Exchange of India)YesEquity SharesININROct 2010
533269BSE (Mumbai Stock Exchange)YesEquity SharesININROct 2010

Biography

VA Tech Wabag Limited, together with its subsidiaries, engages in the design, supply, installation, construction, and operational management of drinking water, waste and industrial water treatment, and des ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 12:45
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.