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MPL bags road project worth `1,200cr
Madhucon Projects Limited (MPL) has bagged an annuity project worth `1,200cr from
National Highway Authority of India for the four-laning of Barsasat-Krishnagar section, West
Bengal. The project is awarded under the National Highway Development Programme – III
on DBFOT basis with semi-annual annuity of `73.98cr. The concession period is 17 years,
including a construction period of 30 months. With this order, MPL’s outstanding order book
stands at `4,100cr (2.5x FY2011E revenue), thus enhancing revenue visibility. Further, this is
positive as the company will be able to book EPC revenue in the coming quarters from this
project, hence boosting its overall revenue.
The key triggers to watch out for MPL should be the pickup in execution in the development
business and building of an attractive asset portfolio before it plans to raise money via IPO,
which would fructify somewhere in FY2012 only and will be based on market conditions
prevailing then. Hence, we believe that till then the stock would be a sector performer and
real value would be created only on unlocking at the subsidiary level. Our SOTP target price
is arrived by assigning a P/E of 10x on FY2012E earnings (`89.9/share), valuing BOT
projects on NPV basis (`52.0/share) and other investments in Madhucon Infra and the real
estate venture on BV basis (`25.2/share and `3.9/share, respectively). We maintain our Buy
view on the stock with an SOTP Target Price of `171.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
MPL bags road project worth `1,200cr
Madhucon Projects Limited (MPL) has bagged an annuity project worth `1,200cr from
National Highway Authority of India for the four-laning of Barsasat-Krishnagar section, West
Bengal. The project is awarded under the National Highway Development Programme – III
on DBFOT basis with semi-annual annuity of `73.98cr. The concession period is 17 years,
including a construction period of 30 months. With this order, MPL’s outstanding order book
stands at `4,100cr (2.5x FY2011E revenue), thus enhancing revenue visibility. Further, this is
positive as the company will be able to book EPC revenue in the coming quarters from this
project, hence boosting its overall revenue.
The key triggers to watch out for MPL should be the pickup in execution in the development
business and building of an attractive asset portfolio before it plans to raise money via IPO,
which would fructify somewhere in FY2012 only and will be based on market conditions
prevailing then. Hence, we believe that till then the stock would be a sector performer and
real value would be created only on unlocking at the subsidiary level. Our SOTP target price
is arrived by assigning a P/E of 10x on FY2012E earnings (`89.9/share), valuing BOT
projects on NPV basis (`52.0/share) and other investments in Madhucon Infra and the real
estate venture on BV basis (`25.2/share and `3.9/share, respectively). We maintain our Buy
view on the stock with an SOTP Target Price of `171.
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