Rakesh Jhunjhunwala portfolio: Yes Securities bullish on this stock, sees over 29% upside
Premium- The domestic brokerage house has initiated coverage on the Rakesh Jhunjhunwala portfolio stock with a Buy rating
Va Tech Wabag has a proven track record of bagging large and complex projects; as on December 2021, its order book stands at around ₹100 bn implying an order book‐to‐bill ratio of 3.3x trailing revenues, which provides revenue visibility for the next couple of years, highlighted brokerage house Yes Securities.
"All its major projects are covered with price variation clauses helping VA Tech Wabag maintain its profitability going forward," the note stated. The domestic brokerage and research firm has initiated coverage on Va Tech Wabag shares with a Buy recommendation for a price target of ₹391 apiece, implying a potential upside of over 29% from current level.
Given the growing attention of the government and multi‐ lateral funding agencies towards an escalating water shortage crisis, the water treatment sector is well poised for a secular, long‐term growth, Yes Securities said.
In its view, Va Tech's robust order book thriving on strong market leadership, execution ramp up, operational efficiencies would help it capitalize on the forthcoming opportunities.
“Further, the company's ability to manage and execute large and complex projects on time through use of superior technology have helped improve its technical qualification and can bid for large project worth Rs10bn plus (only few players) on standalone basis giving an edge over most of its peers," the brokerage note added.
VA Tech Wabag (VATW) is one of the leading multinational companies into water and wastewater treatment space, largely focused on providing EPC and O&M solutions across the globe.
As per the BSE shareholding pattern, Indian ace investor and stock market trader Rakesh Jhunjhunwala's wife Rekha Jhunjhunwala holds 8.04% stake in Va Tech Wabag.
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The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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