Seetharaman believes this strategic push will strengthen the company’s long-term growth beyond its traditional markets.
in the water treatment industry, VA Tech Wabag, is positioning itself for a robust growth phase, backed by a strong order book and expanding international opportunities. The order book currently stands at around ₹16,000 crore, with an additional ₹3,500 crore where the company is the preferred bidder.Below are the edited excerpts of the interview.
Q: So far in this year, you have received orders worth nearly ₹5,000 crore. Could you tell us what your updated order book tendering position and your L1 position is?
A: As of the end of quarter one and as we speak, we are close to a ₹16,000 crore order book. We also announced to the market that close to ₹ 3,500 crore worth of orders are in the pipeline, where we see ourselves as a preferred bidder. In the last few weeks and months, we have placed tenders, we are working on orders that could be anywhere near a billion dollars. The pipeline is looking very healthy.
We are seeing regular inquiries from the Middle East, the African region, and India now. The order book is robust, the outlook is robust, and the pipeline is very robust.
Q: The numbers that you gave us are post-first quarter, where the order book was closer to ₹16,000 crore and that is when you said that you are the preferred bidders for orders that were ₹3,500 crore as well. However, from then to now, you have won orders worth ₹2,500 crore already. What is the updated order book? If you could give us a sense of the kind of order inflows that you had this year so far up to date, and what is the outlook for the remainder of this year when it comes to inflows?
A: In this fiscal, the two main orders that we won was one in Saudi Arabia, which is about a $272 million order for a desalination plant at Yanbu, Saudi Arabia. The other one is a ₹400 crore plus order for Bangalore Water Supply and Sewerage Board (BWSSB), where we are building advanced wastewater treatment plants. So these are the two orders which we announced during quarter one apart from other orders which took us to ₹16,000.
Now, from ₹16,000, we said we are the preferred bidder in another ₹3,500 crore, both in the Middle East as well as Africa and the Indian region. So together with the two, the first quarter, where we had close to ₹2,700-3,000 crore odd orders in, we are seeing another ₹3,000 to ₹3,500 crore of orders which are in the pipeline, where we are the preferred bidder.
We are further bidding for orders close to ₹8,000 crore, which I said are in various stages as we speak. For the year today, we have orders in place already, plus a visibility of another ₹3,500 as of today. Overall, there is much more robustness than there is and we are very, very confident of closing the year with a very strong order
Q: Could you break it up geographically, in India, what kind of order intake are you expecting? Outside of Chennai, is there an opportunity over there, if could give us some colour out there, and the Middle East opportunity as well how big is that?A: This year will be a year that will be dominated by International business. The Middle East will, of course, lead the way, and also the Southeast Asian region. In India, the kind of orders that we are getting is wastewater from the government entities, which are backed by multilaterals, or from the PSUs’ use and other oil and gas companies, where we will build either an effluent treatment plant, zero liquid discharge, or orders in the solar sector, where we have already announced one with RenewSys. We are seeing two, three more inquiries on that count.
From a volume perspective, it will surely be a year that is dominated by the International geographies, but now we are seeing traction also in India. When it comes to the Middle East, as I said, we have submitted orders worth close to a billion dollars in the last couple of months, and a majority of that has been in the Middle East region, specifically in Saudi Arabia, to be more specific. We are seeing a lot of traction over there, as I said, ₹5,000-6,000 crore, easily, we have submitted tenders or RFPs or replied to inquiries from the customer. The Middle East will lead the way. Other international geographies will follow and India is now picking up the action from an industrial perspective and wastewater perspective.
Q: If we had to look at your revenue over the next three to five years, for which you have given us a fair amount of guidance as well, what would the mix look like? How much would come from India, how much would be from overseas and in overseas, and how much would be from Saudi Arabia, and how much would be from other geographies?
A: If you take the last five years, we have had approximately 40-45% coming from international geographies, and anywhere between 50-55% from the domestic front. We see more tilting towards the 50-50%, between international and India.
On the international front, between the Middle East and Africa, we would see anywhere between 60 to 70% of the revenues to come from there.
Q: All new energy sectors, semiconductors,and Green Energy manufacturing all of them, require clean water? How are you placed to cater to that? Also, since SEMICON has been the buzzword lot of players talking about the opportunity. Are you in talks with any of the semicon players for clean water contracts?
A: Yes, we are already responding to inquiries from a few of the semicon companies. We have forayed into the solar sector. We have already got two orders, one from Indosol Solar and one from RenewSys. For us, this is more a decadal view towards the business semicon, green hydrogen and solar these will be the businesses for the future, which we are investing in today.
We have references, we have a proven track record of delivering ultra-pure water. We are also scouting for technologies and partnerships in the market that will help us strengthen our offering. The proof of the pudding is already there, where we have you are seeing orders already coming in.
Q: Guidance for FY26, what kind of revenue growth can you do and will you hold on to these margins, which are in that 13-14% mark?
A: Yes, the margins will be in the 13 to 15% range, which we have guided for a three to five year period. We have said on a CAGR we will be 15 to 20% that also we will continue to hold and wherever possible, our aim will be only to surpass this.
VA Tech Wabag’s current market capitalisation stands at ₹9,367 crore. The stock closed at ₹1,507 on the NSE at 3:30 pm on September 5 and has gained 14% over the past year.
