VA Tech WABAG Ltd - Good visibility in uncertain times - BUY

VA Tech Wabag's (VATW) 4QFY12 revenue grew 32% YoY with strong performance in India and the overseas markets. PAT growth was strong at 10%, considering the company's entry into new markets.

- 4QFY12 order inflow of Rs9.3bn was below expectation due to a delay in industrial orders worth Rs3bn-4bn in India. The management is confident of winning these orders in 1QFY13.

- FY12 revenue grew 16.6% YoY, in line with the guidance. Adjusted for a one-time staff cost provision, Ebitda grew 13.4%. Adjusted PAT grew 21.8%. FY12 order inflow of Rs17.7bn (4.3% YoY) was decent, considering the slowdown in India and the Middle East crisis.

- The management guided for 20% order book growth, 15-18% revenue growth and 30%+ PAT growth for FY13. We build in 19% order book growth, 13.5% revenue growth and 19% PAT growth.

- Consequently, we increase our revenue estimates for FY13 by 7% and for FY14 by 2%. Our Ebitda estimates move up by 5% and 3% and PAT numbers by 5% and 6% respectively for FY13 and FY14. Our new TP is Rs532. Maintain BUY.

Source : Equity Bulls

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