Profit rose on other income as operating margin slid to 8.96%
Revenue grew 20.82% YoY, but expenses grew faster; other income made up 48.65% of pre-tax profit.
Filed 12 Aug 2026, 20:17 IST · after market close · Va Tech Wabag Ltd (WABAG)
Key takeaways
- Consolidated net profit rose 36.93% YoY to Rs 90.1 cr, but other income contributed 48.65% of pre-tax profit.
- Revenue grew 20.82% YoY, yet expenses grew 26.46%, cutting operating margin by 4.06 percentage points to 8.96%.
- Operating margin fell 2.17 percentage points QoQ to 8.96%, its second consecutive quarterly decline from 12.64% in Q3FY26.
Price around the results
Expense growth overtook revenue growth in Q1FY27
Consolidated revenue grew 20.82% YoY, but expenses rose 26.46%, causing operating profit to fall 16.84% and operating margin to narrow by 4.06 percentage points. Net profit still increased 36.93% because pre-tax profit rose 36.33%, helped by a sharp rise in other income. Interest expense fell 8.51% YoY, providing a smaller offset to the operating decline.
Other income accounted for nearly half of pre-tax profit
Other income rose 408.85% YoY and represented 48.65% of pre-tax profit, making the reported profit growth less dependent on operations than the headline net-profit number suggests. The tax rate fell by 0.34 percentage points YoY and 0.89 percentage points QoQ, which also supported net profit. QoQ, revenue fell 37.3% while expenses declined 35.78%, so costs fell more slowly than revenue and margin narrowed by 2.17 percentage points.
Margin declined for a second straight quarter and trails utilities peers
Operating margin moved from 12.64% in Q3FY26 to 11.13% in Q4FY26 and 8.96% in Q1FY27. The latest margin was 22.24 percentage points below the 31.2% median for 23 Utilities peers that had reported, placing Va Tech Wabag third from the bottom. This makes operating execution the key contrast with the improvement in reported net profit.
Management pointed to order-book scale and new water initiatives
Management said all clusters delivered on order intake during the quarter, taking the order book to approximately Rs 19,400 cr. The company said its medium-term targets include an order book above four times revenue, revenue growth of 15–20% CAGR and RoCE above 20%. Management also highlighted a tie-up to establish 100 CBG plants, a Bio-CNG technology collaboration and an AI/ML pilot for reducing non-revenue water.
No immediate market reaction after the after-close filing
The results were filed after market close, so the immediate market response is not yet part of this note. Across the eight prior results, the stock rose four times and fell four times, with a median absolute move of 2.11%, indicating a mixed and generally measured historical reaction.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹887 cr | ₹1,414 cr | -37.30% | +20.82% |
| Other income | ₹58 cr | ₹31 cr | +87.91% | +408.85% |
| Expenses | ₹807 cr | ₹1,257 cr | -35.78% | +26.46% |
| Operating profit | ₹80 cr | ₹157 cr | -49.49% | -16.84% |
| Operating margin (%) | 8.96% | 11.13% | — | — |
| Interest | ₹17 cr | ₹17 cr | +3.61% | -8.51% |
| Depreciation | ₹2 cr | ₹2 cr | +6.67% | +14.29% |
| Profit before tax | ₹118 cr | ₹170 cr | -30.43% | +36.33% |
| Tax | ₹28 cr | ₹42 cr | -32.94% | +34.45% |
| Net profit | ₹90 cr | ₹128 cr | -29.61% | +36.93% |
| EPS (₹) | ₹14.35 | ₹22.68 | -36.73% | +35.63% |
Operating margin of 8.96% compares with a Utilities sector median of 31.20% across 23 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- All clusters delivered on order intake, lifting the order book to approximately INR 19,400 crores.
Guidance & outlook
- The medium-term outlook targets an order book above four times revenue.
- The company targets revenue growth of 15–20% CAGR over the medium term.
- The company targets medium-term RoCE above 20%.
Expansion
- The company has tied up to establish 100 CBG plants.
New initiatives
- The company collaborated with a leading technology provider for Bio-CNG projects.
- The Blue Seed initiative supports emerging water-sector start-ups.
- The company is piloting an AI/ML-based NRW reduction solution in GNN TTRO.
- The company is exploring technologies to digitalize plants and networks in India and the Middle East.
What to watch
- Whether operating margin moves back above 8.96% after two consecutive quarterly declines.
- The share of pre-tax profit coming from other income versus 48.65%.
- Order intake and order-book disclosures against the approximately Rs 19,400 cr reported this quarter.