WABAG Q1 FY27: consolidated PAT +37% YoY, but forex gain masks margin compression
PAT +36.9% YoY · revenue +20.8% · margins compressing
₹886.8 Cr
+20.8% YoY
₹90.1 Cr
+36.9% YoY
9.6%
+0.8pp YoY
₹14.46
VA Tech Wabag's consolidated revenue from operations rose 20.8% YoY to ₹886.8 Cr (standalone ₹739.3 Cr, +15.5% YoY), and reported consolidated PAT of ₹90.1 Cr was up 36.9% YoY (standalone PAT ₹79.3 Cr, +30.2% YoY) — headline numbers that line up with management's own 'historic high' framing and a record ₹19,400 Cr order book. QoQ, revenue fell 37.3% and PAT fell 29.6% against a seasonally strong Q4 FY26 (₹1,414.4 Cr revenue), which is normal sequencing for an EPC/order-execution business rather than a standalone concern.
Q1 FY-2027 vs prior quarters
The headline growth, however, is significantly inflated by a large foreign-exchange gain that WABAG books as a distinct revenue-section line item, separate from both 'revenue from operations' and 'other income': ₹36.8 Cr this quarter versus nil a year ago (and ₹19.7 Cr in Q4 FY26). Stripping this out and re-tax-effecting at the quarter's ~23.8% effective rate, adjusted consolidated PAT is roughly ₹62.1 Cr against ₹65.8 Cr a year ago — a ~5.7% YoY decline, not the +37% reported. Standalone shows the same pattern: adjusted PAT of ~₹58.0 Cr versus ₹60.9 Cr a year ago, down ~4.8%. On an ex-FX basis, operating margin has now compressed for three straight quarters — roughly 13.0% (Q1 FY26) to 11.1% (Q4 FY26) to 9.0% (Q1 FY27) — even though management's own EBITDA metric, which treats the FX gain as operating, shows a flat-to-slightly-up 13.1% margin this quarter.
The stock went into the print at ₹1,903.6, down 10.2% over the past month of trading.
What the summary numbers don't show
EPS (basic, consolidated) ₹14.46 vs ₹10.58 a year ago (reported) — standalone EPS ₹12.73 vs ₹9.79.
Management provided a confident outlook for continued growth, projecting a 15-20% CAGR for revenue and maintaining EBITDA margins between 13-15%. Key drivers for future growth include the expansion of O&M services to reach 20% of the business, increasing international revenue mix (particularly from the Middle East and
— This quarter: missed
Against the prior concall guidance of 15-20% revenue CAGR and 13-15% EBITDA margins, the revenue print is squarely in range, but the margin only clears the band because of the FX gain; on an adjusted basis it sits well below guidance — a miss on the margin leg. No Q1 FY27-specific street consensus was found; the closest public marker is Motilal Oswal's FY27E target of roughly 22-23% EBITDA/PAT CAGR for the full year, against which this quarter's adjusted PAT decline is a soft start rather than a beat. The quarter's corporate developments support the topline story: the order book hit a record ₹19,400 Cr on ₹3,400 Cr of fresh intake, with first-time entries into Kuwait (a 'Mega' SWRO project) and the UAE (Ajman), plus repeat wins from BWSSB and DJB in India and a project in Austria. Net cash position stayed positive for a 14th consecutive quarter at ₹964.9 Cr, a genuine balance-sheet positive unrelated to the FX-gain effect.
W1
Whether ex-FX core operating margin (~9% this quarter, down from ~13% a year ago) recovers toward management's 13-15% guided band in Q2 FY27 without relying on forex gains.
W2
Conversion of the record ₹19,400 Cr order book, including the new Kuwait and UAE wins, into revenue and margin accretion over coming quarters.
W3
Whether the quarterly forex gain (nil → ₹19.7 Cr → ₹36.8 Cr over the last three quarters) reverses or keeps growing — it is now a material swing factor in reported PAT.
Figures converted from ₹ Millions (÷10). No exceptional items this quarter; minority interest negligible. Company reports 'Foreign exchange gains' as a distinct revenue-section line item (₹36.8 Cr this quarter vs nil in the year-ago quarter) separate from 'other income' — this materially inflates reported EBITDA/PAT growth. Consolidated PBT includes a +₹5.5 Cr share of associates/JV profit not present in standalone, explaining the gap between (totalIncome-totalExpenses=₹112.7 Cr) and reported PBT (₹118.2 Cr).