BOFA-Merrill has initiated a BUY on
Va Tech Wabag with the following recommendation,
Va Tech Wabag can can achieve Rs30bn (70%YoY) of order inflows in FY13E vs. its guidance of Rs22bn (25%YoY). We gain confidence as it is well placed in two orders -- Reliance Ind and Sri Lanka (Rs10bn). In addition, the Al-Ghubra project (Rs3.5bn) with Sumitomo will be awarded in 4QFY13 (vs. earlier 1HFY14) as the company is already into engineering for the project
They maintain Buy rating, due to: (1) 15% new order CAGR in FY12-15E, led by domestic business (municipal/ industrial) and new market forays; (2) a rise in O&M revenue to 20% in FY15E (15% in FY12); and (3) a 20% EPS CAGR in FY12-14E, on a 14% revenue CAGR and a 140bp margin increase. EPS expected is Rs 35 and Rs 44 for FY 2013 and FY 2014 with a
Price Target of Rs 645
