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Results Highlights
The company has registered a robust revenue growth of 70.4% yoy to Rs. 4,106 mn, showing
superior execution strength of the company. This strong execution was seen in the building segment
as well as in the road projects viz., Manor Wada Bhiwandi, Nagar Kopargaon and Patiala
Malerkotla.
EBIDTA margins remained under pressure and declined by 34 bps yoy at 16.9%. This was mainly
due to marginal rise in cost of materials as a percentage of sales by 332 bps yoy. Going ahead
we expect the margins to remain between 16.5% to 17%.
At the PAT level we saw a decline in margins by 179 bps yoy at 6.1%. The decline was mainly
due to rise in interest cost as a percentage of sale by 185 bps yoy at 6.2% and in addition to that
we also saw increase in cost of deprecation by 58.5% yoy which further dented the margins.
Average cost of borrowing stands between 13% to 13.5%.
Other Highlights
The present order book stands at Rs. 37,725 mn including L1 of Rs. 4,210 mn (49.4% Roads,
5.85% Bridges, 0.44% Railways, 41.62% Buildings, 0.27% Irrigation, 1.94% Power & 0.48% Others)
which gives the revenue visibility for next 24 to 30 months. The order book to bill ratio stands
at ~4.0x FY11 sales. During the quarter SIIL, added orders worth ~Rs. 8,123 mn and YTD order
inflow stands at ~Rs. 14,354 mn. We saw improvement in order inflows from last quarter and
management expect to maintain the decent flow of orders going ahead. Additionally, the company
is targeting ~Rs 40 bn as its closing order book by end of FY12 while the outstanding bids as on
date stands at ~Rs 25 bn.
During the last quarter the company has added two new BOT projects viz., Sangli Shiroli in Maharashtra
and Patiala Malerkotla, an ongoing project at Punjab which the company bought from
the original concessionaire. Today the company has 9 BOT project of which two projects are operational
viz., Kasheli Bridge and Nagar Kopargaon.
Recently in the month of Jan, 2012 management entered into a Private Equity deal with 3i India
Infrastructure Fund to off load 49% stake in its four road BOT projects for US$61 mn. The road
BOT projects includes Panvel Indapur which is under a separate SPV and the rest i.e. Sangli
Shiroli, Nagar Kopargaon & Ahmednagar Karmala which is under Supreme Infra BOT Holdings
Pvt. Ltd., as informed by the management. This deal will help the company to bring down the debt
levels, meet its project equity requirement (~Rs 5.4 bn) and will ensure early financial closure of
projects. With this deal we can see improvement in margins and higher execution which will drive
the top line going forward.
Valuation & Outlook
In view of the growing order book, efficient execution of ongoing projects, backward integration and
improving track record, we expect the company’s top line to grow at a healthy CAGR rate of ~39%
during FY11A to FY13E. We also expect that the operational BOT projects wpuld generate steady
cashflow to the company going forward. At current market price of Rs 223.75 the stock is trading at a
P/E multiple of 4.4x and 3.5x to its FY12E and FY13E EPS of Rs. 51.1 and Rs. 63.8 per share. We
maintain ‘BUY’ with a target price of Rs. 304 per share with an upside of 36% based on SOTP
method. For the construction business we arrive at a price of Rs 255 per share which discount FY13E
EPS of Rs 63.8 by 4.0x. For BOT projects viz., Manor-Wada-Bhiwandi (MWB) and Nagar Kopargaon
(NK), which are valued on NPV basis gives a value of Rs. 49 per share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Results Highlights
The company has registered a robust revenue growth of 70.4% yoy to Rs. 4,106 mn, showing
superior execution strength of the company. This strong execution was seen in the building segment
as well as in the road projects viz., Manor Wada Bhiwandi, Nagar Kopargaon and Patiala
Malerkotla.
EBIDTA margins remained under pressure and declined by 34 bps yoy at 16.9%. This was mainly
due to marginal rise in cost of materials as a percentage of sales by 332 bps yoy. Going ahead
we expect the margins to remain between 16.5% to 17%.
At the PAT level we saw a decline in margins by 179 bps yoy at 6.1%. The decline was mainly
due to rise in interest cost as a percentage of sale by 185 bps yoy at 6.2% and in addition to that
we also saw increase in cost of deprecation by 58.5% yoy which further dented the margins.
Average cost of borrowing stands between 13% to 13.5%.
Other Highlights
The present order book stands at Rs. 37,725 mn including L1 of Rs. 4,210 mn (49.4% Roads,
5.85% Bridges, 0.44% Railways, 41.62% Buildings, 0.27% Irrigation, 1.94% Power & 0.48% Others)
which gives the revenue visibility for next 24 to 30 months. The order book to bill ratio stands
at ~4.0x FY11 sales. During the quarter SIIL, added orders worth ~Rs. 8,123 mn and YTD order
inflow stands at ~Rs. 14,354 mn. We saw improvement in order inflows from last quarter and
management expect to maintain the decent flow of orders going ahead. Additionally, the company
is targeting ~Rs 40 bn as its closing order book by end of FY12 while the outstanding bids as on
date stands at ~Rs 25 bn.
During the last quarter the company has added two new BOT projects viz., Sangli Shiroli in Maharashtra
and Patiala Malerkotla, an ongoing project at Punjab which the company bought from
the original concessionaire. Today the company has 9 BOT project of which two projects are operational
viz., Kasheli Bridge and Nagar Kopargaon.
Recently in the month of Jan, 2012 management entered into a Private Equity deal with 3i India
Infrastructure Fund to off load 49% stake in its four road BOT projects for US$61 mn. The road
BOT projects includes Panvel Indapur which is under a separate SPV and the rest i.e. Sangli
Shiroli, Nagar Kopargaon & Ahmednagar Karmala which is under Supreme Infra BOT Holdings
Pvt. Ltd., as informed by the management. This deal will help the company to bring down the debt
levels, meet its project equity requirement (~Rs 5.4 bn) and will ensure early financial closure of
projects. With this deal we can see improvement in margins and higher execution which will drive
the top line going forward.
Valuation & Outlook
In view of the growing order book, efficient execution of ongoing projects, backward integration and
improving track record, we expect the company’s top line to grow at a healthy CAGR rate of ~39%
during FY11A to FY13E. We also expect that the operational BOT projects wpuld generate steady
cashflow to the company going forward. At current market price of Rs 223.75 the stock is trading at a
P/E multiple of 4.4x and 3.5x to its FY12E and FY13E EPS of Rs. 51.1 and Rs. 63.8 per share. We
maintain ‘BUY’ with a target price of Rs. 304 per share with an upside of 36% based on SOTP
method. For the construction business we arrive at a price of Rs 255 per share which discount FY13E
EPS of Rs 63.8 by 4.0x. For BOT projects viz., Manor-Wada-Bhiwandi (MWB) and Nagar Kopargaon
(NK), which are valued on NPV basis gives a value of Rs. 49 per share.
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