VA Tech Wabag is an infra sector company, specializing in water treatment for municipal and industrial users. It has built more than 100 projects in India, among them a desalination unit in Chennai and Asia's largest wastewater treatment plant in Jamnagar, Gujarat. The company had posted a disappointing Q1Fy14 performance but its Q2Fy14 are very encouraging. Driven largely by the robust topline, the company ended the quarter with a consolidated net profit at Rs.17 crore, down 5% (YoY) but sequentially, it was up almost 6 times. Income, driven mainly by exports, was up 34% at Rs.464 crore. Income from India was 33% of the total revenue with 22% contribution to EBIT. Rest of World (RoW) was the bread winner with this income rising 63% and EBIT was up 38%. RoW EBIT margin is healthy at 78% vs 65% (YoY).

The company has a robust order intake, which in H1 was at Rs.2034 crore. Its order book currently stands at Rs.6605 crore of which Rs.1037 crore comprises of orders where advance money/LC is still awaited. The good part of the company is that it is in the growth sector of water management, it is debt free and is sitting on cash balance of Rs.211 crore. Its equity is small at Rs.5.31 crore and reserves as at 30^th Sept 2013 stood at a whopping Rs.771 crore.  Q3 is expected to be good though we could start seeing slowdown in Indian orders from Q4 as elections would then be due in a few months.  As at 30^th Sept 2013, promoters held 31.01% stake and institutions held 50.29% of which FIIs held 29.67%.