VA Tech Wabag - BUY
CMP Rs568, Target Rs725
Fundamentally strong company into Engineering space VA Tech Wabag is really making waves in Chinese market and expected to grow at a phenomenal rate.
Investment into water management
technology is the need in current times. Internationally, water is
scarce and rising demand of water fueled by growing population is
making it even scarcer.This is because water is unequally distributed all over
the world; India contains 17% of world population and has only 4% of the total
water resources. VA Tech Wabag (VA Tech) is the biggest player in water
management space in India has tried to evolve as a biggest player in India and
investment in this space will definitely reap profits.
Healthy order book
It has order book of Rs42bn (2.9x
FY12 revenues) which provides strong revenue growth. Also it has well
diversified order book.
The company has large cash
balance of Rs2.9bn which translates into 20% of its market
capitalization and has a very strong balance sheet. VA Tech is planning to leverage
the cash for an acquisition, which will definitely take the stock price into
skies. We would give it a P/E of 14x to FY15E EPS to arrive at a 7-9 month
target price of Rs725. BUY BUY BUY. Invest without any risk and relax and wait
for profits to reap in near future.
Note : VA Tech Wabag is a Shariah Compliant stock also and hence those
investors who are following shariah guidelines can also invest in this
stock. Its Ethical to invest in this particular stock.
I am also thinking to buy this stock. As the price of this stock is increasing so this is the best time to invest in this stock. I also consult with an Stock Tips Provider & he told me that this is good stock for investment.
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