Wabag margin rebounds, but remains 17.41 points below utility peer median
The margin rebound from 8.96% in Q1FY27 came as costs grew slower than revenue; management said the order book exceeds four times annual revenue.
Filed 05 Nov 2026, 20:35 IST · after market close · Va Tech Wabag Ltd (WABAG)
Key takeaways
- Consolidated operating margin rose 3.47 percentage points sequentially to 12.43% as revenue grew 12.79% while expenses grew 8.50%.
- Year-on-year net profit increased 23.23%, but other income still contributed 22.87% of pre-tax profit.
- Wabag's 12.43% operating margin was 17.41 percentage points below the Utilities peer median across 24 reported companies.
Price around the results
Revenue growth converted into a sharper operating rebound
In consolidated Q2FY27 results, revenue grew 19.86% year on year while expenses rose 17.54%, lifting operating profit 39.19% and expanding the margin by 1.73 percentage points. Sequentially, revenue increased 12.79% against 8.50% expense growth, driving a 3.47-percentage-point margin recovery from Q1FY27. Net profit rose 23.23% year on year and 15.98% sequentially.
Other income remains material to reported profit
Other income fell 27.34% year on year and 45.91% sequentially, yet still represented 22.87% of pre-tax profit, making earnings quality an important consideration. The lower tax rate helped modestly, with the rate down 0.31 percentage points year on year and 0.61 percentage points sequentially. Interest expense was 9.69% lower year on year but 2.91% higher sequentially.
Margin recovers from Q1 but stays below peer levels
The operating margin has been uneven across recent quarters, moving from 13.02% in Q1FY26 to 10.70%, 12.64%, 11.13%, 8.96% and 12.43% in the latest quarter. Wabag's 12.43% margin was 17.41 percentage points below the 29.84% median for 24 Utilities peers that had reported, placing it fifth from the bottom.
Management points to large orders and digital operations
Management said the order book is more than four times annual revenue and that H1 wins included a Mega SWRO project in Kuwait and a Mega desalination project for RIL at Jamnagar. The company also said it had piloted an AI-based operations and decision-support system in Bahrain and was exploring digitalisation of other plants and networks in India and the Middle East. Management targets RoCE above 20% and RoE above 15% over the medium term.
No market reaction yet after the post-close filing
The consolidated results were filed after market close, so there is no market reaction to report yet. Across the last eight result reactions, the stock rose four times and fell four times, with a median absolute move of 1.73%, indicating no consistent direction after results.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,000 cr | ₹887 cr | +12.79% | +19.86% |
| Other income | ₹31 cr | ₹58 cr | -45.91% | -27.34% |
| Expenses | ₹876 cr | ₹807 cr | +8.50% | +17.54% |
| Operating profit | ₹124 cr | ₹80 cr | +56.35% | +39.19% |
| Operating margin (%) | 12.43% | 8.96% | — | — |
| Interest | ₹18 cr | ₹17 cr | +2.91% | -9.69% |
| Depreciation | ₹2 cr | ₹2 cr | +6.25% | +0.00% |
| Profit before tax | ₹136 cr | ₹118 cr | +15.06% | +22.74% |
| Tax | ₹32 cr | ₹28 cr | +12.10% | +21.15% |
| Net profit | ₹105 cr | ₹90 cr | +15.98% | +23.23% |
| EPS (₹) | ₹17.58 | ₹14.35 | +22.51% | +28.98% |
Operating margin of 12.43% compares with a Utilities sector median of 29.84% across 24 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- WABAG secured two landmark Mega orders in the first half of the year, including projects in Kuwait and Jamnagar.
Guidance & outlook
- WABAG says its order book is more than four times annual revenue and its healthy bid pipeline supports its positioning for the years ahead.
- WABAG targets RoCE above 20% and RoE above 15% over the medium term.
New orders
- WABAG secured a Mega SWRO project in Kuwait and a Mega desalination deal with RIL for Jamnagar.
- WABAG's H1 wins included entry into the UAE through Ajman, expansion in Europe with Donauinsel Water Works, and municipal orders from BWSSB and DJB.
New initiatives
- WABAG piloted an AI-based operations and decision support system at its AMAS plant in Bahrain.
- WABAG is exploring technologies to digitalize additional plants and networks in India and the Middle East.
What to watch
- Whether operating margin holds above 12.43% after the rebound from 8.96% in Q1FY27.
- Whether other income remains below 22.87% of pre-tax profit.
- Whether expense growth stays below revenue growth after the latest 8.50% versus 12.79% sequential split.