CCCL (Improving visibility, BUY): After posting 26% QoQ order inflow growth in 1Q, CCCL’s Rs45.3bn order book provides robust revenue visibility. Improving pre-qualifications in the power plant, airport and metro rail sectors, coupled with a small base could translate into strong order book growth. We expect margins to move in a narrow band, as higher margins in the Chennai airport project are counter-balanced by low-margin orders booked during the downturn. CCCL has a strong execution history, a systems-driven bidding approach and a keen focus on risk management. Given decent return ratios and 22% EPS CAGR over FY11-13, the stock is attractive at 10.9x FY12ii adjusted PER. We upgrade the stock to BUY.
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