💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 18.2% YoY to INR 1,568.5 Cr in H1 FY26. The O&M business contributed 19% of total revenue (INR 298 Cr), while EPC/EP projects accounted for 81% (INR 1,270.5 Cr). O&M is a key focus area for stable cash flows.

Geographic Revenue Split

International projects accounted for 47% of H1 FY26 revenue (INR 737.2 Cr), while India projects contributed 53% (INR 831.3 Cr). The order book also reflects this split with nearly 50% from international markets.

Profitability Margins

Consolidated PAT margin was 9.6% in H1 FY26 (INR 150.6 Cr), up from 9.5% YoY. Standalone PAT margin was 9.9% (INR 131.2 Cr). EBITDA margin stood at 13.8%, aligning with the 13-15% target band.

EBITDA Margin

Consolidated EBITDA margin was 13.8% in H1 FY26, a slight decrease from 13.9% in H1 FY25. Standalone EBITDA margin was 14.2%. Core profitability is driven by execution efficiency and high-margin industrial projects.

Capital Expenditure

The company operates an asset-light model; specific planned capex in INR Cr is not disclosed, but the company maintained a net cash position of INR 675.3 Cr (excluding HAM) as of September 2025.

Credit Rating & Borrowing

Consolidated borrowings were reduced to INR 236.6 Cr in Sept 2025 from INR 357.3 Cr in March 2025. Prudent debt management resulted in net interest income of INR 8.4 Cr for H1 FY26.

⚙️ Operational Drivers

Raw Materials

Cost of sales (including materials and subcontracting) was INR 1,169.4 Cr, representing 74.5% of total revenue in H1 FY26. Specific raw materials include membranes, pumps, pipes, and chemicals used in water treatment plant construction.

Import Sources

Not specifically disclosed, though the company executes projects in Nepal (Melamchi), Saudi Arabia (Yanbu), and SE Asia (PETRONAS), implying global sourcing for these regions.

Capacity Expansion

Current order book stands at INR 16,000 Cr (approx. 4x annual revenue), providing visibility for 3-3.5 years. The company secured INR 3,500 Cr in new orders in H1 FY26.

Raw Material Costs

Cost of sales was INR 1,169.4 Cr (74.5% of revenue) in H1 FY26, up 19.1% YoY from INR 981.7 Cr. Procurement is managed through a strategic shift to an EP (Engineering & Procurement) model to optimize costs.

Manufacturing Efficiency

Efficiency is driven by the 'Asset Light Business Model' and a focus on high-margin industrial and international projects to maintain a 13-15% EBITDA margin.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth will be achieved through the 'Wriddhi' strategy, focusing on: 1) Shifting from EPC to higher-margin EP models. 2) Increasing O&M contribution to 20% of total revenue. 3) Expanding into 'Future Energy Solutions' such as Ultra-Pure Water (UPW) for semiconductors and Compressed Bio-Gas (CBG). 4) Leveraging a strong INR 16,000 Cr order book with 50% international exposure.

Products & Services

Desalination plants (e.g., 400 MLD Perur), Sewage Treatment Plants (STP), Effluent Treatment Plants (ETP), Ultra-Pure Water (UPW) systems, Compressed Bio-Gas (CBG) plants, and Operation & Maintenance (O&M) services.

Brand Portfolio

WABAG

New Products/Services

Breakthrough orders in 'Future Energy Solutions' (CBG and UPW) were secured in H1 FY26. While specific revenue % for these new segments is not yet disclosed, they represent the 'Century 2.0' growth strategy.

Market Expansion

Targeting deeper penetration in the Industrial segment and expansion in MENA, CIS, and SE Asia regions, supported by a current international order book of nearly INR 8,000 Cr.

Market Share & Ranking

Global leader in water technology solutions with a 100-year heritage; specific market share percentage is not disclosed.

Strategic Alliances

Strategic municipal water platform with Norfund (USD 100 million) and a management buyout history backed by ICICI Venture.

🌍 External Factors

Industry Trends

The water industry is growing due to global water scarcity and a shift towards sustainable recycling. Future growth is driven by 'Future Energy' sectors (Green Hydrogen, Semiconductors) requiring specialized water treatment. WABAG is positioned as a technology-first provider for these niches.

Competitive Landscape

Competes with domestic and international players in water infrastructure and O&M segments; market dynamics are shifting towards technology-intensive industrial projects.

Competitive Moat

Durable advantages include a 100-year brand legacy, specialized technical expertise in large-scale desalination (e.g., 400 MLD Perur), and an asset-light, net-cash-positive financial profile (INR 675.3 Cr net cash) which is sustainable due to the high-margin O&M business (19% of revenue).

Macro Economic Sensitivity

Sensitive to global infrastructure spending and government budgets for water projects; specific impact % is not disclosed.

Consumer Behavior

Increasing industrial and municipal focus on water sustainability, wastewater recycling, and 'Zero Liquid Discharge' (ZLD) solutions.

Geopolitical Risks

Operations in diverse regions like Nepal, Middle East, and SE Asia expose the company to regional regulatory and political shifts that could impact project timelines.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by environmental pollution norms, wastewater discharge standards, and municipal water quality regulations across various jurisdictions including India, Nepal, and the Middle East.

Environmental Compliance

Focus on 'Building a Sustainable Water Future'; ESG report published but specific compliance costs in INR are not disclosed.

Taxation Policy Impact

Consolidated tax rate of ~23.7% in H1 FY26 (INR 46.9 Cr tax on INR 197.5 Cr PBT).

⚠️ Risk Analysis

Key Uncertainties

Project execution delays in the INR 16,000 Cr order book (3-3.5 year cycle) and forex volatility (INR 17.6 Cr gain in H1 FY26) are primary risks.

Geographic Concentration Risk

47% of revenue is from international markets (RoW) and 53% is from India.

Technology Obsolescence Risk

Mitigated by R&D and entry into high-tech UPW and CBG sectors; the company positions itself as a 'Technology-first' provider.

Credit & Counterparty Risk

Order book is 'supported by strong payment securities,' and the company has maintained a net cash positive status for 11 consecutive quarters, indicating high receivable quality.