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Punj Lloyd bags orders worth `1,595cr
Punj Lloyd has bagged three orders (two domestic and one international) aggregating to
`1,595cr. The first order worth `1,123cr from IOCL involves design and EPC for Paradip
Refinery project. The second order for `288cr is from Harouge Oil Operations in Libya
involving design and EPC of a new oil storage complex. Lastly, an order worth `184cr
from the Government of West Bengal includes planning, design and construction of three
medical colleges. The expected execution period for the projects is 16–21 months. This is
positive for the company as order inflow for 2QFY2011 was disappointing at `1,030cr, so
this order further enhances the revenue visibility, taking the outstanding order book to
`27,065cr (3x FY2011E revenue).
On the valuation front, the stock has seen huge underperformance (~50%) over the last
12 months, which we believe has brought it to trough valuations given the company’s scale
of operations and the opportunities that lie ahead. Against this backdrop, we expect the
stock to outperform over the medium to long term. Hence, we maintain Buy on the stock
with a Target Price of `153.
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