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MPL bags road project worth `1,500cr
Madhucon Projects Ltd. (MPL) has bagged an annuity project worth `1,500cr from
National Highway Authority of India for four-laning of Ranchi-Rargaon-Jamshedpur
section of NH-33, Jharkhand. The project is awarded under the National Highway
Development Programme-III on DBFOT basis, with semi-annual annuity of `133.2cr. The
concession period is 15 years, including a construction period of 30 months. This is the
same order in which MPL was disqualified and later the Delhi High Court had intervened.
With this order, MPL’s outstanding order book stands at ~`5,600cr (3.3x FY2011E
revenue), thus enhancing revenue visibility. This is positive for MPL, as the company will be
able to book EPC revenue in the coming quarters (FY2013 onwards), thus boosting its
overall revenue.
The key triggers to watch out for MPL should be the pick-up in execution in the
development business and building of an attractive asset portfolio before it plans to raise
money via an IPO, which would fructify somewhere in FY2012 only and will be based on
the market conditions prevailing then. Hence, we believe until then the stock would be a
sector performer and real value would be created only on unlocking at the subsidiary level.
We maintain our Buy view on the stock with an SOTP target price of `171. Our SOTP
target price is arrived by assigning P/E of 10x on FY2012E earnings (`89.9/share), valuing
the 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)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
MPL bags road project worth `1,500cr
Madhucon Projects Ltd. (MPL) has bagged an annuity project worth `1,500cr from
National Highway Authority of India for four-laning of Ranchi-Rargaon-Jamshedpur
section of NH-33, Jharkhand. The project is awarded under the National Highway
Development Programme-III on DBFOT basis, with semi-annual annuity of `133.2cr. The
concession period is 15 years, including a construction period of 30 months. This is the
same order in which MPL was disqualified and later the Delhi High Court had intervened.
With this order, MPL’s outstanding order book stands at ~`5,600cr (3.3x FY2011E
revenue), thus enhancing revenue visibility. This is positive for MPL, as the company will be
able to book EPC revenue in the coming quarters (FY2013 onwards), thus boosting its
overall revenue.
The key triggers to watch out for MPL should be the pick-up in execution in the
development business and building of an attractive asset portfolio before it plans to raise
money via an IPO, which would fructify somewhere in FY2012 only and will be based on
the market conditions prevailing then. Hence, we believe until then the stock would be a
sector performer and real value would be created only on unlocking at the subsidiary level.
We maintain our Buy view on the stock with an SOTP target price of `171. Our SOTP
target price is arrived by assigning P/E of 10x on FY2012E earnings (`89.9/share), valuing
the 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)
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