J Kumar Infraprojects - Strong Performance; Result Update Q2FY15 :: Edelweiss, PDF link

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J Kumar Infraprojects (JKIL) delivered strong Q2FY15 results with revenues spurting 27% YoY led by robust execution in the Delhi Metro project. With majority of the work done during the quarter being mechanised in nature, there were savings on the labour cost front, resulting in 260bps YoY expansion in EBITDA margin to 20.8%.  Higher interest costs meant PAT at INR202mn grew 15% YoY. The company’s order book (including L1 orders of ~INR11bn) stood at INR42bn, which is 3.1x TTM revenues and provides healthy revenue visibility. JKIL remains on track to deliver 21% EPS CAGR over FY14-16E, along with 16% plus RoE.

Healthy performance boosts confidence in growth prospects

Top line came in at INR3bn, up 27% YoY. The company has utilised ~INR900mn from the QIP proceeds towards capex and working capital requirements and expects to use the balance ~INR450mn to meet its future growth needs. Interest costs were higher than expected due to INR600mn funds locked in upcoming bids. This, along with higher tax rate due to deferred tax provision, contained PAT growth to 15% YoY.

Robust order book lends revenue visibility

JKIL ended Q2FY15 with order book of INR42bn (including L1 orders of ~INR11bn). Order intake in H1FY15 stood at ~INR7bn (~INR9bn in FY14). The company expects traction in order intake to continue with the Mumbai Metro project entering the bidding stage. Apart from this, the company is focusing on upcoming metro projects in Ahmadabad, Lucknow, Nagpur and Pune along with EPC contracts at the NHAI end.

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https://www.edelweiss.in/research/J-Kumar-Infraprojects--Strong-Performance;-Result-Update-Q2FY15/27557.html