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Showing posts with label Unity Infraprojects. Show all posts
Showing posts with label Unity Infraprojects. Show all posts
07 June 2013
25 January 2013
Unity Infraprojects Cruising on order inflow:: Angel Broking
Unity Infraprojects (UIP) is one of the fastest growing mid-cap company in the
infrastructure space with focus on civil construction segment (residential,
commercial and industrial structure portfolio) and infrastructure projects in
irrigation & water and transportation segments. The company has a healthy order
book of `4,495cr as of 2QFY2013. Given the strong bid pipeline and L1 status
for projects worth `1,400cr, we estimate UIP to report a revenue CAGR of 11.5%
over FY2012-FY2014E. Its focus on high growth buildings and water/irrigation
segment provides confidence on future growth. We initiate coverage with a Buy
rating and a SOTP target price of `59.
Comfortable order book-to-sales provides revenue visibility: The company’s order
book stands at `4,495cr (excluding L1 orders worth `1,400cr) as on 2QFY2013,
thereby translating into a book-to-bill ratio of 2.2x trailing revenues. This gives a
comfortable revenue visibility for the next two years given the short execution
period of 24-30 months. The order book mix comprises of projects in the civil
(52%), irrigation & WS (21%) and transportation (27%) segments.
Well diversified order book with pan - India presence: UIP initially started off with
a presence in Maharashtra and historically remained skewed towards projects in
and around Maharashtra. It has come a long way in the last decade, making
its presence felt across India by diversifying into new verticals and bidding for new
projects across the country. As on 30th September 2012, 59.1% of UIP’s order
book catered to the North, South and East regions of the country.
Foray into asset ownership model: From being a mere EPC player, UIP has forayed
into asset ownership model through its wholly owned subsidiary Unity Infrastructure
Assets Ltd and has bagged 3 BOT projects under its portfolio. The company has
started construction activity in one of its road BOT project – the Chomu-Mahla project
and is in an advanced stage of achieving financial closure for the other two projects.
Valuation & recommendation: On the back of healthy order book and growth
potential, we believe the company would clock revenue CAGR of 11.5% over
FY2012-2014E. The stock is currently trading at a P/E of 3.5x and 3.1x our FY2013
and FY2014 diluted earnings estimates. We have used sum-of-the-parts (SOTP)
method to value the stock. We value the construction business at a P/E of 3.5x
FY2014E earnings (~30% discount to larger companies under coverage) and UIP’s
BOT projects on a DCF basis at a CoE of 16%. We initiate coverage on the stock
with a Buy rating and target price of `59, indicating an upside of 27%.
29 June 2012
Unity Infraprojects Ltd. -Strong order book to support growth ::BP Equities
Strong order book to support growth
Results Highlights
The company has registered a decent revenue growth of 25.7% yoy to Rs. 7,176 mn. The growth
was supported by strong execution of orders especially form the civil construction segment. The
company has guided a revenue growth of 15-20% going forward.
20 February 2012
Buy Unity Infraprojects; Target : Rs 73:: ICICI Securities, pdf link
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http://content.icicidirect.com/mailimages/ICICIdirect_UnityInfraprojects_Q3FY12.pdf
Strong margin show…
Unity Infraprojects’ (Unity) Q3FY12 results were above our estimates as
the company reported superior margins of | 14.5% vs. our estimates of
13%. The order book stands at | 3,932 crore (2.2x order book to bill ratio),
which should improve further with materialisation of L-1 bids (~| 1015
crore). We highlight that Unity has bucked the trend and continued to
deliver superior results vis-à-vis its peers. With plans to raise | 175 crore
from stake dilution in two SPVs and a possible rate cut in H2CY12, Unity
could further benefit in terms of debt reduction and interest cost,
respectively. We maintain our BUY recommendation on the stock with a
target price of | 73 per share.
ƒ Another positive surprise on EBITDA front
Unity’s revenues grew 9.9% YoY to | 489.6 crore in Q3FY12, slightly
below our expectation. However, net profit at | 24.7 crore was higher
than our estimates mainly due to superior margins. Unity again posted
superior margins of ~14.5% vs. our estimates of ~13%.
ƒ Order book at | 3,932 crore, 2.2x order book to bill ratio
Unity’s order book stood at |3,932 crore, 2.2x order book to bill ratio (on
TTM basis). The current order book implies inflow of ~| 1690 crore in
YTDFY12. In terms of L-1 bids, it currently stands at | 1015 crore. The
company is well poised to achieve or even surpass its order inflow
guidance of ~| 2,000 crore for FY12.
ƒ Looking to dilute stake in 2 SPVs and raise | 175 crore
Unity is looking to dilute its stake in the Bengaluru land bank of 20 acres,
which it holds in JV and a hotel project in Nagpur. It is planning to raise
| 175 crore from the same. Additionally, the company also has ~39 acres
of another land parcel Bengaluru. The company has not provided any
further details on the same as the plans are at a nascent stage.
V a l u a t i o n
At the CMP, the stock is trading at 3.4x FY13E EPS and 0.5x FY13E P/BV.
Unity has continued its superior performance. We believe it is expected to
perform better than other construction companies in the challenging
environment. Hence, we maintain our BUY recommendation on the stock.
We have valued the stock at | 73 per share (4.2x EV/EBITDA, 30% discount
to leading midcap construction companies).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_UnityInfraprojects_Q3FY12.pdf
Strong margin show…
Unity Infraprojects’ (Unity) Q3FY12 results were above our estimates as
the company reported superior margins of | 14.5% vs. our estimates of
13%. The order book stands at | 3,932 crore (2.2x order book to bill ratio),
which should improve further with materialisation of L-1 bids (~| 1015
crore). We highlight that Unity has bucked the trend and continued to
deliver superior results vis-à-vis its peers. With plans to raise | 175 crore
from stake dilution in two SPVs and a possible rate cut in H2CY12, Unity
could further benefit in terms of debt reduction and interest cost,
respectively. We maintain our BUY recommendation on the stock with a
target price of | 73 per share.
ƒ Another positive surprise on EBITDA front
Unity’s revenues grew 9.9% YoY to | 489.6 crore in Q3FY12, slightly
below our expectation. However, net profit at | 24.7 crore was higher
than our estimates mainly due to superior margins. Unity again posted
superior margins of ~14.5% vs. our estimates of ~13%.
ƒ Order book at | 3,932 crore, 2.2x order book to bill ratio
Unity’s order book stood at |3,932 crore, 2.2x order book to bill ratio (on
TTM basis). The current order book implies inflow of ~| 1690 crore in
YTDFY12. In terms of L-1 bids, it currently stands at | 1015 crore. The
company is well poised to achieve or even surpass its order inflow
guidance of ~| 2,000 crore for FY12.
ƒ Looking to dilute stake in 2 SPVs and raise | 175 crore
Unity is looking to dilute its stake in the Bengaluru land bank of 20 acres,
which it holds in JV and a hotel project in Nagpur. It is planning to raise
| 175 crore from the same. Additionally, the company also has ~39 acres
of another land parcel Bengaluru. The company has not provided any
further details on the same as the plans are at a nascent stage.
V a l u a t i o n
At the CMP, the stock is trading at 3.4x FY13E EPS and 0.5x FY13E P/BV.
Unity has continued its superior performance. We believe it is expected to
perform better than other construction companies in the challenging
environment. Hence, we maintain our BUY recommendation on the stock.
We have valued the stock at | 73 per share (4.2x EV/EBITDA, 30% discount
to leading midcap construction companies).
18 February 2012
PDF link- Jaiprakash Associates, Unity Infraprojects, Mercator Lines:: Kotak Sec,
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http://www.kotaksecurities.com/pdf/dmb/MorningInsight15022012.pdf
JAIPRAKASH ASSOCIATES LTD
RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.89
FY13E P/E: 21.7X
UNITY INFRAPROJECTS
RECOMMENDATION: BUY
TARGET PRICE: RS.70
FY13E P/E: 3.3X
MERCATOR LIMITED
RECOMMENDATION: BUY
TARGET PRICE: RS.40
FY13E P/E: 9.1X
07 December 2011
Buy UNITY INFRAPROJECTS::TARGET PRICE: RS.74:: Kotak Sec
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UNITY INFRAPROJECTS
PRICE: RS.37 RECOMMENDATION: BUY
TARGET PRICE: RS.74 FY13E P/E: 2.5X
Result highlights: Results were better than our estimates and led by
improved execution and better than expected operating margins. Stock is
currently trading at very attractive valuations and we continue to maintain
BUY on the company.
q Revenue growth stood at 13% YoY, in line with our estimates. This was
led by strong order book and improved execution.
q Operating margins remained strong at 16.1% for Q2FY12 due to decline
in construction expenses. We however expect margins to be in the range
of 12.5-13% going forward.
q Net profit growth was better than our estimates due to strong revenue
growth and excellent margins. However, interest outgo jumped up quite
sharply.
q We marginally tweak our FY12 estimates and roll forward our valuations
on FY13 estimates and arrive at a revised price target of Rs 74 (Rs 86 earlier)
at 5x FY13 estimated earnings and continue to maintain BUY on the
company.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UNITY INFRAPROJECTS
PRICE: RS.37 RECOMMENDATION: BUY
TARGET PRICE: RS.74 FY13E P/E: 2.5X
Result highlights: Results were better than our estimates and led by
improved execution and better than expected operating margins. Stock is
currently trading at very attractive valuations and we continue to maintain
BUY on the company.
q Revenue growth stood at 13% YoY, in line with our estimates. This was
led by strong order book and improved execution.
q Operating margins remained strong at 16.1% for Q2FY12 due to decline
in construction expenses. We however expect margins to be in the range
of 12.5-13% going forward.
q Net profit growth was better than our estimates due to strong revenue
growth and excellent margins. However, interest outgo jumped up quite
sharply.
q We marginally tweak our FY12 estimates and roll forward our valuations
on FY13 estimates and arrive at a revised price target of Rs 74 (Rs 86 earlier)
at 5x FY13 estimated earnings and continue to maintain BUY on the
company.
25 November 2011
Buy Unity Infraprojects; Target : Rs 52 :: ICICI Securities
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Margins surprise positively…
Unity Infraprojects’ (Unity) Q2FY12 results came above our expectations
largely due to a positive surprise at the EBITDA margin of 16.1% (our
expectation: 13%). In terms of order inflow, Unity has bagged a healthy
order inflow of | 1492 crore in YTD in FY12 and is L-1 bidder for projects
worth ~| 1,525 crore. The order book stands at | 3,795 crore (2.1x order
book to bill ratio), which should improve further with materialisation of L-
1 bids. Going ahead, the industry environment is expected to remain
challenging. We believe Unity will perform better than other construction
companies and the current valuations are very attractive. Hence, we
maintain our BUY recommendation on the stock.
ƒ Q2FY12 beats our estimates, positively surprised by EBITDA
Unity’s revenues grew 12.6% YoY to | 389.7crore in Q2FY12, slightly
better than our expectation. However, the net profit declined 4.3% YoY to
| 20.6 crore due to a sharp rise in interest expenses (| 31.4 crore in
Q2FY12 vs. | 17.6 crore in Q2FY11). Nonetheless, the results were above
our expectations as Unity positively surprised us with an EBITDA margin
of 16.1% in Q2FY12.
ƒ Order book strong at | 15,034 crore, 2.9x order book to bill ratio
Unity’s order book stood at | 3795 crore, 2.1 order book to bill ratio (on
TTM basis). In terms of order inflow, Unity witnessed healthy order inflow
of ~| 1492 crore. Additionally, the company currently has L-1 bids worth
| 1525 crore. The materialisation of L-1 bids would improve its revenue
visibility significantly, going ahead.
ƒ WC improves significantly, debt level reduces marginally
Unity’s WC on TTM basis has come down sharply from 233 days (64% of
the revenues) in FY11 to 199 days (54.5% of the revenues) in H1FY12. The
improvement in WC has led to a marginal reduction in debt from | 848.1
crore in FY11 to | 813.7 crore in H1FY12. The net debt to equity ratio has
also improved from 1.0x in FY11 to 0.7x in H1FY12.
V a l u a t i o n
At the CMP, the stock is trading at 2.2x FY13E EPS and 0.3x FY13E P/BV.
We expect Unity to perform better than other construction companies in
the challenging environment. Hence, we maintain our BUY
recommendation on the stock. We value the stock at | 52/share (4x
EV/EBIDA, 33% discount to leading construction companies).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Margins surprise positively…
Unity Infraprojects’ (Unity) Q2FY12 results came above our expectations
largely due to a positive surprise at the EBITDA margin of 16.1% (our
expectation: 13%). In terms of order inflow, Unity has bagged a healthy
order inflow of | 1492 crore in YTD in FY12 and is L-1 bidder for projects
worth ~| 1,525 crore. The order book stands at | 3,795 crore (2.1x order
book to bill ratio), which should improve further with materialisation of L-
1 bids. Going ahead, the industry environment is expected to remain
challenging. We believe Unity will perform better than other construction
companies and the current valuations are very attractive. Hence, we
maintain our BUY recommendation on the stock.
ƒ Q2FY12 beats our estimates, positively surprised by EBITDA
Unity’s revenues grew 12.6% YoY to | 389.7crore in Q2FY12, slightly
better than our expectation. However, the net profit declined 4.3% YoY to
| 20.6 crore due to a sharp rise in interest expenses (| 31.4 crore in
Q2FY12 vs. | 17.6 crore in Q2FY11). Nonetheless, the results were above
our expectations as Unity positively surprised us with an EBITDA margin
of 16.1% in Q2FY12.
ƒ Order book strong at | 15,034 crore, 2.9x order book to bill ratio
Unity’s order book stood at | 3795 crore, 2.1 order book to bill ratio (on
TTM basis). In terms of order inflow, Unity witnessed healthy order inflow
of ~| 1492 crore. Additionally, the company currently has L-1 bids worth
| 1525 crore. The materialisation of L-1 bids would improve its revenue
visibility significantly, going ahead.
ƒ WC improves significantly, debt level reduces marginally
Unity’s WC on TTM basis has come down sharply from 233 days (64% of
the revenues) in FY11 to 199 days (54.5% of the revenues) in H1FY12. The
improvement in WC has led to a marginal reduction in debt from | 848.1
crore in FY11 to | 813.7 crore in H1FY12. The net debt to equity ratio has
also improved from 1.0x in FY11 to 0.7x in H1FY12.
V a l u a t i o n
At the CMP, the stock is trading at 2.2x FY13E EPS and 0.3x FY13E P/BV.
We expect Unity to perform better than other construction companies in
the challenging environment. Hence, we maintain our BUY
recommendation on the stock. We value the stock at | 52/share (4x
EV/EBIDA, 33% discount to leading construction companies).
21 September 2011
Buy UNITY INFRAPROJECTS : target Rs.86:Kotak Sec,
Please Share:: India Equity Research Reports, IPO and Stock News
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UNITY INFRAPROJECTS
PRICE: RS.49 RECOMMENDATION: BUY
TARGET PRICE: RS.86 FY12E (PE): 3.7X
We recently met with the management to understand the industry scenario
in terms of order inflow as well as competition. Company is confident of
achieving Rs 40 bn worth of order inflow diversified across buildings, water
supply and transportation. Stock is trading at very attractive valuations and
we maintain BUY recommendation on Unity Infraprojects. We present
below the key highlights about the company -
q Order inflow remained strong for Unity Infra during FY12 till date
q Restructuring the company into strategic business verticals to enable
faster order intake
q We maintain our estimates and BUY rating on the company.
Order inflow scenario
Order inflow during FY11 for the sector was impacted due to issues such as land acquisition
and right of way issues which delayed overall project award process. With
the recent land acquisition bill, project award process is expected to improve in comparison
with last year. Along with this, company has indicated that government has
also realized the need to fasten the project award process and thus expects order
inflow for the sector as a whole to improve in H2FY12. Company has specified that
though award process was quite slow in Maharashtra in past couple of quarters, it is
likely to remain slow in near term due to upcoming BMC elections. However, significant
opportunities are coming from other states such as MP, Gujarat and Bihar.
Unity infra has bagged orders worth Rs 1.7 bn for canals and dams from state of
Madhya Pradesh during FY12 till date while it is L1 in orders worth Rs 2bn from
Gujarat. Company's overall L1 status stands at nearly Rs 15 bn diversified across
Vizag, Delhi, Bangalore and Gujarat.
Company has also restructured its business in strategic business verticals such as
transport, buildings and water. Each vertical is headed by experienced CEO's and
supported by respective teams and resources. This strategy has helped the company
achieve an order inflow of nearly Rs 7.8 bn in FY12 till date and L1 status of nearly
Rs 15 bn diversified across these segments. Order inflow has improved significantly
for the company during FY12 as against Rs 12 bn of order inflow during entire FY11.
Company expects an order inflow of nearly Rs 40 bn for FY12. We however remain
conservative in our estimates and expect an order inflow of Rs 25 bn for FY12.
Status of key projects
Work is progressing on schedule now for an order worth Rs 6.2bn in joint venture
with Axelia Utility Management Pvt Ltd from Municipal Corporation of Greater
Mumbai(MCGM) for supply, installation and maintenance of AMR water meters of
various sizes for the Eastern and Western Suburbs of Mumbai. This project is nearly
50% complete now and company expects to complete this project by Sep, 2012.
Along with this, project worth Rs 11.5bn executed in JV with IVRCL for construction
of 8.3km long tunnel from Kapurbawadi to Bhandup complex is also running ahead
of schedule. It expects to complete this project in next 2.5 years.
Company also bagged a road project worth Rs 1.98 bn for two-laning of section
from Chomu to Mahla via Renwal, Jobnerin the State of Rajasthan through Public
Private Partnership on Design, Build, Finance Operate and Transfer (DBFOT) basis for
a concession period of 25 years. Financial closure for this project is expected to be
done by Oct, 2011 and construction is likely to commence from Dec, 2011. Company
expects initial toll collections after completion of construction to be nearly Rs
150-160 mn per year.
Progress on real estate projects
Unity Infra has invested in the real estate sector for acquiring land parcels at various
places through its subsidiary Unity Realty and Developers Ltd (URDL). We present
below the details of these investments as well as projects -
n Mall development at Nagpur - URDL has already invested Rs 360mn in Nagpur
real estate project for construction of 6 retail malls. But company has been given
land parcels for only three malls and land for remaining three parcels is still to be
given to the company. Company is in talks with Nagpur Municipal Corporation
about future viability of these projects.
n Development of IT park in Goa - For development of IT park in Goa, company
had acquired 40,000 sq m of land at a total investment of Rs 100mn. But due to
pending clearances from the government, work has not yet commenced.
n Hotel project in Pune -. Company has exited from Hotel venture in Pune and
has sold its stake to Kamath Hotels for Rs 450 mn to be given over next 3 years
as against Rs 350 mn invested in this project. It has already received its first
tranche of Rs 150 mn payment in Feb, 2011.
n Real estate development in Calcutta and Bangalore - Unity has also acquired
land parcels in Calcutta and Bangalore for development of residential
townships. It has acquired 15 acres of land in Bangalore at a total cost of Rs
390mn and 25 acres in Calcutta at a total cost of Rs 750mn. Company is still
awaiting certain clearances before commencement of Bangalore real estate
project launch. This is expected by Sep-Oct, 2011 and project would be launched
only after that.
However, progress on these projects is much slower than our expectations and we
thus currently don't incorporate any valuation from these projects in our target price
calculation.
Financial outlook
n With a strong order book of nearly Rs 35 bn, we maintain our estimates and
expect revenues to grow at a CAGR of 12% in FY11-FY13. We remain conservative
in our order inflow and execution estimates as against company's expectation
of Rs 40 bn worth of order inflow.
n Operating margins are expected to remain strong due to focus towards higher
margin buildings and water supply related projects. Though margins stood at
13% during Q1FY12, but we factor in slightly higher competition going ahead
and expect margins to be around 12.5% for the company going forward.
n Interest costs are likely to remain high during FY12 due to higher interest rates.
However, company expects to reduce overall borrowings going forward through
efficient working capital management as well as through stake sale in in Nagpur
real estate project. We thus maintain our estimates and expect net profits to
grow at a CAGR of 10% between FY11-FY13.
Valuation and recommendation
n At current price of Rs 49, stock is trading very attractive valuations of at 3.7x and
3.2x P/E and 3.9x and 3.7x EV/EBITDA multiples for FY12 and FY13 respectively.
n We maintain our estimates and target price for the company. We also don't ascribe
any valuations for the real estate segment due to delays seen in launch of
projects in Bangalore and Kolkata.
n We maintain our price target of Rs 86 on FY12 estimates based on 6.5x FY12
estimated earnings and continue to maintain BUY on the company.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UNITY INFRAPROJECTS
PRICE: RS.49 RECOMMENDATION: BUY
TARGET PRICE: RS.86 FY12E (PE): 3.7X
We recently met with the management to understand the industry scenario
in terms of order inflow as well as competition. Company is confident of
achieving Rs 40 bn worth of order inflow diversified across buildings, water
supply and transportation. Stock is trading at very attractive valuations and
we maintain BUY recommendation on Unity Infraprojects. We present
below the key highlights about the company -
q Order inflow remained strong for Unity Infra during FY12 till date
q Restructuring the company into strategic business verticals to enable
faster order intake
q We maintain our estimates and BUY rating on the company.
Order inflow scenario
Order inflow during FY11 for the sector was impacted due to issues such as land acquisition
and right of way issues which delayed overall project award process. With
the recent land acquisition bill, project award process is expected to improve in comparison
with last year. Along with this, company has indicated that government has
also realized the need to fasten the project award process and thus expects order
inflow for the sector as a whole to improve in H2FY12. Company has specified that
though award process was quite slow in Maharashtra in past couple of quarters, it is
likely to remain slow in near term due to upcoming BMC elections. However, significant
opportunities are coming from other states such as MP, Gujarat and Bihar.
Unity infra has bagged orders worth Rs 1.7 bn for canals and dams from state of
Madhya Pradesh during FY12 till date while it is L1 in orders worth Rs 2bn from
Gujarat. Company's overall L1 status stands at nearly Rs 15 bn diversified across
Vizag, Delhi, Bangalore and Gujarat.
Company has also restructured its business in strategic business verticals such as
transport, buildings and water. Each vertical is headed by experienced CEO's and
supported by respective teams and resources. This strategy has helped the company
achieve an order inflow of nearly Rs 7.8 bn in FY12 till date and L1 status of nearly
Rs 15 bn diversified across these segments. Order inflow has improved significantly
for the company during FY12 as against Rs 12 bn of order inflow during entire FY11.
Company expects an order inflow of nearly Rs 40 bn for FY12. We however remain
conservative in our estimates and expect an order inflow of Rs 25 bn for FY12.
Status of key projects
Work is progressing on schedule now for an order worth Rs 6.2bn in joint venture
with Axelia Utility Management Pvt Ltd from Municipal Corporation of Greater
Mumbai(MCGM) for supply, installation and maintenance of AMR water meters of
various sizes for the Eastern and Western Suburbs of Mumbai. This project is nearly
50% complete now and company expects to complete this project by Sep, 2012.
Along with this, project worth Rs 11.5bn executed in JV with IVRCL for construction
of 8.3km long tunnel from Kapurbawadi to Bhandup complex is also running ahead
of schedule. It expects to complete this project in next 2.5 years.
Company also bagged a road project worth Rs 1.98 bn for two-laning of section
from Chomu to Mahla via Renwal, Jobnerin the State of Rajasthan through Public
Private Partnership on Design, Build, Finance Operate and Transfer (DBFOT) basis for
a concession period of 25 years. Financial closure for this project is expected to be
done by Oct, 2011 and construction is likely to commence from Dec, 2011. Company
expects initial toll collections after completion of construction to be nearly Rs
150-160 mn per year.
Progress on real estate projects
Unity Infra has invested in the real estate sector for acquiring land parcels at various
places through its subsidiary Unity Realty and Developers Ltd (URDL). We present
below the details of these investments as well as projects -
n Mall development at Nagpur - URDL has already invested Rs 360mn in Nagpur
real estate project for construction of 6 retail malls. But company has been given
land parcels for only three malls and land for remaining three parcels is still to be
given to the company. Company is in talks with Nagpur Municipal Corporation
about future viability of these projects.
n Development of IT park in Goa - For development of IT park in Goa, company
had acquired 40,000 sq m of land at a total investment of Rs 100mn. But due to
pending clearances from the government, work has not yet commenced.
n Hotel project in Pune -. Company has exited from Hotel venture in Pune and
has sold its stake to Kamath Hotels for Rs 450 mn to be given over next 3 years
as against Rs 350 mn invested in this project. It has already received its first
tranche of Rs 150 mn payment in Feb, 2011.
n Real estate development in Calcutta and Bangalore - Unity has also acquired
land parcels in Calcutta and Bangalore for development of residential
townships. It has acquired 15 acres of land in Bangalore at a total cost of Rs
390mn and 25 acres in Calcutta at a total cost of Rs 750mn. Company is still
awaiting certain clearances before commencement of Bangalore real estate
project launch. This is expected by Sep-Oct, 2011 and project would be launched
only after that.
However, progress on these projects is much slower than our expectations and we
thus currently don't incorporate any valuation from these projects in our target price
calculation.
Financial outlook
n With a strong order book of nearly Rs 35 bn, we maintain our estimates and
expect revenues to grow at a CAGR of 12% in FY11-FY13. We remain conservative
in our order inflow and execution estimates as against company's expectation
of Rs 40 bn worth of order inflow.
n Operating margins are expected to remain strong due to focus towards higher
margin buildings and water supply related projects. Though margins stood at
13% during Q1FY12, but we factor in slightly higher competition going ahead
and expect margins to be around 12.5% for the company going forward.
n Interest costs are likely to remain high during FY12 due to higher interest rates.
However, company expects to reduce overall borrowings going forward through
efficient working capital management as well as through stake sale in in Nagpur
real estate project. We thus maintain our estimates and expect net profits to
grow at a CAGR of 10% between FY11-FY13.
Valuation and recommendation
n At current price of Rs 49, stock is trading very attractive valuations of at 3.7x and
3.2x P/E and 3.9x and 3.7x EV/EBITDA multiples for FY12 and FY13 respectively.
n We maintain our estimates and target price for the company. We also don't ascribe
any valuations for the real estate segment due to delays seen in launch of
projects in Bangalore and Kolkata.
n We maintain our price target of Rs 86 on FY12 estimates based on 6.5x FY12
estimated earnings and continue to maintain BUY on the company.
25 August 2011
Buy Unity Infraprojects; Target : Rs 76::ICICI Securities
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L - 1 b i d s g e t t i n g s t r o n g e r …
Unity Infraprojects’ Q1FY12 results were better than our expectation
largely on account of lower-than-expected interest expenses (a key
difference from other construction companies) as this quarter it used the
lower working capital loan limit with the realisation of WC during the
quarter (down to | 950-1000 crore from | 1086 crore from Q4FY11). The
order book stood at | 3478 crore, order book to bill ratio was 2x (on TTM
basis). Additionally, the company has witnessed order inflow of ~| 1100
crore in YTD CY11 and currently has L-1 bids worth | 1500 crore, a
majority of which it expects will materialise in the next one or two
months. We maintain our BUY recommendation on the stock.
ƒ Bottomline supported by lower-than-expected interest expenses
Unity’s revenues grew 10.1% YoY to | 376 crore in Q1FY12 despite the
challenging business environment. EBITDA margin was flat at 13%.
However, the bottomline was better than our expectation at | 19.6
crore due to lower-than-expected interest expenses. Interest expenses
came down from | 30.1 crore in Q4FY11 to | 22.2 crore in Q1FY12 as
the company used the lower working capital limit in Q1FY12 with the
reduction of WC. The WC has come down sequentially to | 950-1000
crore in Q1FY12 from | 1086 crore in Q4FY11.
ƒ Order book to bill ratio at 2x, L-1 bids expand to | 1500 crore
Unity’s order book is at | 3478 crore, implying an order book to bill
ratio of 2x on a TTM basis. The order inflow has been healthy at ~|
1100 crore in YTDCY11. In terms of L-1 bids, it has now expanded to |
1500 crore from | 850 crore in the last quarter. The majority of L-1 bids
are expected to materialise in the next one or two months.
V a l u a t i o n
At the CMP, the stock is quoting at attractive valuation of 3.1x FY13E EPS
and 0.4x FY13E P/BV. While some pain is expected to remain in the near
term due to the challenging business environment, we believe Unity is
expected to perform better than other construction companies. The
current valuations are very attractive. Hence, we maintain our BUY
recommendation on the stock.
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L - 1 b i d s g e t t i n g s t r o n g e r …
Unity Infraprojects’ Q1FY12 results were better than our expectation
largely on account of lower-than-expected interest expenses (a key
difference from other construction companies) as this quarter it used the
lower working capital loan limit with the realisation of WC during the
quarter (down to | 950-1000 crore from | 1086 crore from Q4FY11). The
order book stood at | 3478 crore, order book to bill ratio was 2x (on TTM
basis). Additionally, the company has witnessed order inflow of ~| 1100
crore in YTD CY11 and currently has L-1 bids worth | 1500 crore, a
majority of which it expects will materialise in the next one or two
months. We maintain our BUY recommendation on the stock.
ƒ Bottomline supported by lower-than-expected interest expenses
Unity’s revenues grew 10.1% YoY to | 376 crore in Q1FY12 despite the
challenging business environment. EBITDA margin was flat at 13%.
However, the bottomline was better than our expectation at | 19.6
crore due to lower-than-expected interest expenses. Interest expenses
came down from | 30.1 crore in Q4FY11 to | 22.2 crore in Q1FY12 as
the company used the lower working capital limit in Q1FY12 with the
reduction of WC. The WC has come down sequentially to | 950-1000
crore in Q1FY12 from | 1086 crore in Q4FY11.
ƒ Order book to bill ratio at 2x, L-1 bids expand to | 1500 crore
Unity’s order book is at | 3478 crore, implying an order book to bill
ratio of 2x on a TTM basis. The order inflow has been healthy at ~|
1100 crore in YTDCY11. In terms of L-1 bids, it has now expanded to |
1500 crore from | 850 crore in the last quarter. The majority of L-1 bids
are expected to materialise in the next one or two months.
V a l u a t i o n
At the CMP, the stock is quoting at attractive valuation of 3.1x FY13E EPS
and 0.4x FY13E P/BV. While some pain is expected to remain in the near
term due to the challenging business environment, we believe Unity is
expected to perform better than other construction companies. The
current valuations are very attractive. Hence, we maintain our BUY
recommendation on the stock.
22 August 2011
UNITY INFRAPROJECTS:: : BUY TARGET PRICE: RS.86 ::Kotak Sec,
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UNITY INFRAPROJECTS LTD
PRICE: RS.53 RECOMMENDATION: BUY
TARGET PRICE: RS.86 FY12E P/E: 4.0X
Result highlights: Results were better than our estimates and led by
improved execution and lower than expected interest outgo. Stock is
currently trading at very attractive valuations and we continue to maintain
BUY on the company.
q Revenue growth stood at 11% YoY, in line with our estimates. This was
led by strong order book and improved execution.
q Operating margins remained strong at 13% for Q1FY12 and company expects
to maintain margins at the current levels going forward.
q Net profit growth was better than our estimates due to strong margins
and lower than expected interest outgo.
q We tweak our valuation multiples to factor in de-rating of the sector due
to high interest rates and high working capital requirements. We also
reduce valuations for the real estate segment due to delays seen in
launch of projects in Bangalore and Kolkata. We arrive at a revised price
target of Rs 86 (Rs 109 earlier) on FY12 estimates and continue to maintain
BUY on the company.
Revenue growth in line with our estimates
n Revenue growth stood at 11% YoY, in line with our estimates. This was led by
strong order book and improved execution.
n Order inflow during Q1FY12 stood at Rs 7.5 bn and current order book of company
stands at Rs 34.78 bn. This order book is diversified across civil (53%),
water supply and irrigation (35%) and transportation (12%). Revenues during
Q1FY12 were diversified across civil (54%), civil (32%) and others(14%).
n Company has guided for an order book growth of 30-35% during FY12. It is L1
in orders worth Rs 15.5 bn worth of orders spread across building, water and remaining
in transportation. These orders are likely to be finalized during Q2FY12.
n We however continue to remain conservative in our estimates and maintain our
estimates and expect revenues to grow at a CAGR of 12% in FY11-FY13.
Operating margins led by higher margin projects in the order
book
n Operating margins remained strong at 13% for Q1FY12 and company expects to
maintain margins at the current levels going forward.
n We maintain our estimates and expect margins to be 12.5% going forward.
High interest rates continued to hurt the profits
n Net profit growth was better than our estimates due to strong margins and lower
than expected interest outgo.
n High interest rates and higher borrowings continued to impact the net profit
growth of the company. Company plans to reduce high cost borrowings by end
of FY12 through low cost ECB funds or by selling stake in Nagpur real estate
project.
n We maintain our estimates and expect profits to grow at a CAGR of 10% between
FY11-FY13.
Valuation and recommendation
n At current price of Rs 53, stock is trading very attractive valuations of at 4x and
3.5x P/E and 3.9x and 3.7x EV/EBITDA multiples for FY12 and FY13 respectively.
n We tweak our valuation multiples to factor in de-rating of the sector due to high
interest rates and high working capital requirements. We also reduce valuations
for the real estate segment due to delays seen in launch of projects in Bangalore
and Kolkata.
n We arrive at a revised price target of Rs 86 (Rs 109 earlier) on FY12 estimates
based on 6.5x one year forward estimated earnings and continue to maintain
BUY on the company.
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UNITY INFRAPROJECTS LTD
PRICE: RS.53 RECOMMENDATION: BUY
TARGET PRICE: RS.86 FY12E P/E: 4.0X
Result highlights: Results were better than our estimates and led by
improved execution and lower than expected interest outgo. Stock is
currently trading at very attractive valuations and we continue to maintain
BUY on the company.
q Revenue growth stood at 11% YoY, in line with our estimates. This was
led by strong order book and improved execution.
q Operating margins remained strong at 13% for Q1FY12 and company expects
to maintain margins at the current levels going forward.
q Net profit growth was better than our estimates due to strong margins
and lower than expected interest outgo.
q We tweak our valuation multiples to factor in de-rating of the sector due
to high interest rates and high working capital requirements. We also
reduce valuations for the real estate segment due to delays seen in
launch of projects in Bangalore and Kolkata. We arrive at a revised price
target of Rs 86 (Rs 109 earlier) on FY12 estimates and continue to maintain
BUY on the company.
Revenue growth in line with our estimates
n Revenue growth stood at 11% YoY, in line with our estimates. This was led by
strong order book and improved execution.
n Order inflow during Q1FY12 stood at Rs 7.5 bn and current order book of company
stands at Rs 34.78 bn. This order book is diversified across civil (53%),
water supply and irrigation (35%) and transportation (12%). Revenues during
Q1FY12 were diversified across civil (54%), civil (32%) and others(14%).
n Company has guided for an order book growth of 30-35% during FY12. It is L1
in orders worth Rs 15.5 bn worth of orders spread across building, water and remaining
in transportation. These orders are likely to be finalized during Q2FY12.
n We however continue to remain conservative in our estimates and maintain our
estimates and expect revenues to grow at a CAGR of 12% in FY11-FY13.
Operating margins led by higher margin projects in the order
book
n Operating margins remained strong at 13% for Q1FY12 and company expects to
maintain margins at the current levels going forward.
n We maintain our estimates and expect margins to be 12.5% going forward.
High interest rates continued to hurt the profits
n Net profit growth was better than our estimates due to strong margins and lower
than expected interest outgo.
n High interest rates and higher borrowings continued to impact the net profit
growth of the company. Company plans to reduce high cost borrowings by end
of FY12 through low cost ECB funds or by selling stake in Nagpur real estate
project.
n We maintain our estimates and expect profits to grow at a CAGR of 10% between
FY11-FY13.
Valuation and recommendation
n At current price of Rs 53, stock is trading very attractive valuations of at 4x and
3.5x P/E and 3.9x and 3.7x EV/EBITDA multiples for FY12 and FY13 respectively.
n We tweak our valuation multiples to factor in de-rating of the sector due to high
interest rates and high working capital requirements. We also reduce valuations
for the real estate segment due to delays seen in launch of projects in Bangalore
and Kolkata.
n We arrive at a revised price target of Rs 86 (Rs 109 earlier) on FY12 estimates
based on 6.5x one year forward estimated earnings and continue to maintain
BUY on the company.
12 June 2011
Unity Infraprojects: Buy :: Business Line
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Low valuations, pick-up in order flows, healthy margins and a strong presence in the higher-margin water and irrigation segment make the stock of construction contractor Unity Infraprojects an attractive buy for investors with a two/three year perspective.
At Rs 69, the stock of Unity Infra trades at a modest 5.7 times the trailing 12- month earnings and 4.7 times the estimated earnings for FY-12, at a slight discount to peers such as Pratibha Industries. However, given its small-cap status, investors are advised to limit portfolio exposure to the stock.
Following stalled execution and drying up of fresh orders, stocks of construction companies fell steeply in the second half of FY-11. However, a few companies have seen a revival in order inflow over the past few months.
Unity Infra's current order book stands at Rs 3,600 crore, at 2.2 times the FY-11 revenues. While the order book is flat (Rs 3,548 crore at end-June 2010), the past three months alone have seen inflows of over Rs 530 crore. Further, the average size of orders is over Rs 100 crore.
Diversified presence helped the company tide over the slow order flows from the roads segment, whose share in the order book dropped to 4 per cent at end-May 2011 against 24 per cent a year earlier. This drop was compensated by the irrigation segment, where the order book contribution jumped to 46 per cent from 28 per cent in the year-ago period. The rest of the order book is made up by civil constructions such as industrial plants and buildings.
With awarding of road projects now gathering steam, Unity Infra could see orders growing at a healthy pace. Irrigation and water projects could see support from government spending programmes. Established relationships with State and municipal bodies could help the company win repeat orders in this segment. The company has also begun to scale up to a developer from being a pure contractor.
Revenues and net profits have clocked a three-year compounded annual growth of 26 per cent and 16 per cent to Rs 1,702 crore and Rs 94 crore respectively in FY-11. Operating margins have held at 14 per cent over the past three years. However, high interest costs proved a drag, resulting in net margins languishing at 5.6 per cent. Debt-equity ratio is also high at 1.3 times, though interest cover has been maintained at just over three times. The working capital cycle has also been maintained even as prolonged monsoons delayed project execution in the latter half of FY11
04 April 2011
Buy Unity Infraprojects, Target (% Up / Down) 86 (24%):: Unicon
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Company Description
Unity Infra projects Ltd., (UIPL) is a leading infrastructure company. Started as
an EPC contractor, UIPL is now a full fledged infrastructure company with
specialization in civil construction (transportation) and infrastructure segments
(irrigation & water supply). UIPL has also forayed into new areas like real
estate development, road projects on BOT basis & telecom.
Investment Rationale
Ø Diversified and sound order-book of INR 35.7 bn (2.4x its FY10 revenue)
provides revenue visibility over FY13e. About 76% of its order-book is state
sponsored projects entails low risk to deferment or cancellation of projects.
Ø Increasing ticket size of the contract (increased from ~INR 650Mn in FY05 to
~INR 5.7bn in FY10) enables to mitigate the margin risk involved in small
and scattered projects.
Ø Proven track record of completing complex projects in time and higher Networth enables to bid for larger projects. UIPL's net worth has increased
post QIP (Dec'10 by INR 730Mn) which entails it to bid for bigger projects.
Concerns
Ø Further increase in commodity prices and high cost of debt could be a
material threat to our earning estimates.
Ø Another major threat to our earning estimates would be lower than our
expectation of order intake over FY13e. Within our earning estimate, we
have factored in order-book growth of +15% and +10% for FY12 and FY13
respectively, which in our views seems to be achievable.
Outlook & Valuation
UIPL is trading at attractive valuation. Since FY07, UIPL has been trading at 5x
its one year forward earning whereas it is currently available at FY13e PE of
4.4x.
Given the a) stock trading at low of its one year forward earning since FY07, b)
revenue visibility over 2.5 years, C) revenue and EPs growing at CAGR of 17%
and 33% respectively over FY13e, Buy for target price of INR 86, +25%.
Company Description
Unity Infra projects Ltd., (UIPL) is a Mumbai based leading infrastructure
company with proven execution track record of over 30 years. Started as an
EPC contractor, UIPL is now a full fledged infrastructure company with
specialization in civil construction (transportation) and infrastructure segments
(irrigation & water supply). UIPL has to its credit of building various stadiums,
airports, railway stations and irrigation projects in the country. UIPL has also
forayed into new areas like real estate development, road projects on BOT basis
& telecom.
Civil Constructions segment undertakes to construct residential and commercial
buildings, mass housing projects, township, industrial structures, airports,
infotech parks, hotels and hospitals, education complex, stadium, railway
stations etc. While transportation division undertakes construction of roads,
bridges, flyovers, subways and tunnels, the Irrigation & Water supply verticals
undertakes project relating to dams, tunnels, lift irrigation, water supply and
sewerage and micro tunnelling.
Investment Rationale
Diversified and sound order-book of INR 35.7 bn provides revenue visibility
over FY13
UIPL has proven execution capability with growing asset base. Its diversified
and sound order-book of ~INR 35.73bn (2.4x its FY10 revenue) provides revenue
visibility over next 2.4 years. More than 75% of its orders are from state
sponsored projects and remaining 25% comes from private sector. So there is
low concern as to the cancellation or deferment of projects.
UIPL is not regional player but has well diversified order-book span across
states in India. About 73.7% of its current order-book is to be executed in the
state of Maharashtra rest 26.3% is in the state of AP, Delhi, UP, Haryana, Karnataka
etc.
Increasing Ticket size of the contract
With proven execution record, the average ticket size of the order for UIPL has
increased from ~INR 650Mn in FY05 to ~INR 5,725Mn. The big ticket size orders
enable to deploy the resources effectively resulting in better operating profit
margin. With gaining expertise in micro tunnelling and projects involving higher
engineering skills, it now competes with its peers who are established in
constructions. UIPL's net worth has also increased post QIP (Dec'10 by INR
730Mn) which enables it to bid for bigger projects
Proven track record of completing complex project in time
UIPL has to its credit of completing complex projects in time. Like a) expansion
o f t e r m i n a l 1 B a t M u m b a i A i r p o r t w i t h o u t d i s r u p t i n g o p e r a t i o n s , b )
strengthening of Tansa dam execution without emptying Dam and c) rabale
railway station built on operational railway line. This makes it the most eligible
contender to bid for complex projects, going forward.
Attractive Valuation
UIPL is currently trading at 4.1x our FY13e earning estimate. Historically, it has
been trading at average one year forward earning of 5x since FY07. With revenue
and profit expected to grow at CAGR of 16.7x and 33x over FY11-13, stock is
trading at EV/Sales ratio of 0.4x and EV/EBITDA of 2.7x (FY13e).
Risks & Concerns
Rising commodity prices and higher cost to serve debt
UIPL like its peers is also exposed to the risk of rise in raw material prices. Although,
over more than 70% of its orders are from the state sponsored projects and are
covered with price escalation clause, severe uptick in commodity prices may impact
its operating profit margin. Besides, higher interest rate regime also leads to low
incremental growth in orders. The current cost of debt of UIPL is ~12%.
UIPL aims to launch its Bangalore project now and its Kolkata project in Q2FY2012.
Goa property development will take another three-four months, once more clarity
comes due to political issues. Further, there is no progress as far as the Nagpur
project is concerned.
We have not factored in the value of its investment in real-estate venture which
works out to ~INR 13/shares, (0.5x P/BV). This adds as margin of safety to our
valuation. UIPL has so far invested INR 1.96bn in its real estate port folio of property
situated at Nagpur, Pune and Goa. So, there is upside risk to our price target for
any successful and timely land development.
Financ ial s
For FY12 and FY13, we expect UIPL to register sales and profit CAGR of 16.7% and
33% respectively with RoCE of 19%(FY13e). We also expect its Debt to come down
to 0.5x its equity from current level of 1.2x.
India Equity Research Reports, IPO and Stock News
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Company Description
Unity Infra projects Ltd., (UIPL) is a leading infrastructure company. Started as
an EPC contractor, UIPL is now a full fledged infrastructure company with
specialization in civil construction (transportation) and infrastructure segments
(irrigation & water supply). UIPL has also forayed into new areas like real
estate development, road projects on BOT basis & telecom.
Investment Rationale
Ø Diversified and sound order-book of INR 35.7 bn (2.4x its FY10 revenue)
provides revenue visibility over FY13e. About 76% of its order-book is state
sponsored projects entails low risk to deferment or cancellation of projects.
Ø Increasing ticket size of the contract (increased from ~INR 650Mn in FY05 to
~INR 5.7bn in FY10) enables to mitigate the margin risk involved in small
and scattered projects.
Ø Proven track record of completing complex projects in time and higher Networth enables to bid for larger projects. UIPL's net worth has increased
post QIP (Dec'10 by INR 730Mn) which entails it to bid for bigger projects.
Concerns
Ø Further increase in commodity prices and high cost of debt could be a
material threat to our earning estimates.
Ø Another major threat to our earning estimates would be lower than our
expectation of order intake over FY13e. Within our earning estimate, we
have factored in order-book growth of +15% and +10% for FY12 and FY13
respectively, which in our views seems to be achievable.
Outlook & Valuation
UIPL is trading at attractive valuation. Since FY07, UIPL has been trading at 5x
its one year forward earning whereas it is currently available at FY13e PE of
4.4x.
Given the a) stock trading at low of its one year forward earning since FY07, b)
revenue visibility over 2.5 years, C) revenue and EPs growing at CAGR of 17%
and 33% respectively over FY13e, Buy for target price of INR 86, +25%.
Company Description
Unity Infra projects Ltd., (UIPL) is a Mumbai based leading infrastructure
company with proven execution track record of over 30 years. Started as an
EPC contractor, UIPL is now a full fledged infrastructure company with
specialization in civil construction (transportation) and infrastructure segments
(irrigation & water supply). UIPL has to its credit of building various stadiums,
airports, railway stations and irrigation projects in the country. UIPL has also
forayed into new areas like real estate development, road projects on BOT basis
& telecom.
Civil Constructions segment undertakes to construct residential and commercial
buildings, mass housing projects, township, industrial structures, airports,
infotech parks, hotels and hospitals, education complex, stadium, railway
stations etc. While transportation division undertakes construction of roads,
bridges, flyovers, subways and tunnels, the Irrigation & Water supply verticals
undertakes project relating to dams, tunnels, lift irrigation, water supply and
sewerage and micro tunnelling.
Investment Rationale
Diversified and sound order-book of INR 35.7 bn provides revenue visibility
over FY13
UIPL has proven execution capability with growing asset base. Its diversified
and sound order-book of ~INR 35.73bn (2.4x its FY10 revenue) provides revenue
visibility over next 2.4 years. More than 75% of its orders are from state
sponsored projects and remaining 25% comes from private sector. So there is
low concern as to the cancellation or deferment of projects.
UIPL is not regional player but has well diversified order-book span across
states in India. About 73.7% of its current order-book is to be executed in the
state of Maharashtra rest 26.3% is in the state of AP, Delhi, UP, Haryana, Karnataka
etc.
Increasing Ticket size of the contract
With proven execution record, the average ticket size of the order for UIPL has
increased from ~INR 650Mn in FY05 to ~INR 5,725Mn. The big ticket size orders
enable to deploy the resources effectively resulting in better operating profit
margin. With gaining expertise in micro tunnelling and projects involving higher
engineering skills, it now competes with its peers who are established in
constructions. UIPL's net worth has also increased post QIP (Dec'10 by INR
730Mn) which enables it to bid for bigger projects
Proven track record of completing complex project in time
UIPL has to its credit of completing complex projects in time. Like a) expansion
o f t e r m i n a l 1 B a t M u m b a i A i r p o r t w i t h o u t d i s r u p t i n g o p e r a t i o n s , b )
strengthening of Tansa dam execution without emptying Dam and c) rabale
railway station built on operational railway line. This makes it the most eligible
contender to bid for complex projects, going forward.
Attractive Valuation
UIPL is currently trading at 4.1x our FY13e earning estimate. Historically, it has
been trading at average one year forward earning of 5x since FY07. With revenue
and profit expected to grow at CAGR of 16.7x and 33x over FY11-13, stock is
trading at EV/Sales ratio of 0.4x and EV/EBITDA of 2.7x (FY13e).
Risks & Concerns
Rising commodity prices and higher cost to serve debt
UIPL like its peers is also exposed to the risk of rise in raw material prices. Although,
over more than 70% of its orders are from the state sponsored projects and are
covered with price escalation clause, severe uptick in commodity prices may impact
its operating profit margin. Besides, higher interest rate regime also leads to low
incremental growth in orders. The current cost of debt of UIPL is ~12%.
UIPL aims to launch its Bangalore project now and its Kolkata project in Q2FY2012.
Goa property development will take another three-four months, once more clarity
comes due to political issues. Further, there is no progress as far as the Nagpur
project is concerned.
We have not factored in the value of its investment in real-estate venture which
works out to ~INR 13/shares, (0.5x P/BV). This adds as margin of safety to our
valuation. UIPL has so far invested INR 1.96bn in its real estate port folio of property
situated at Nagpur, Pune and Goa. So, there is upside risk to our price target for
any successful and timely land development.
Financ ial s
For FY12 and FY13, we expect UIPL to register sales and profit CAGR of 16.7% and
33% respectively with RoCE of 19%(FY13e). We also expect its Debt to come down
to 0.5x its equity from current level of 1.2x.
22 February 2011
Buy SIMPLEX INFRASTRUCTURES: target RS.109:: Kotak Sec
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UNITY INFRAPROJECTS LTD
RECOMMENDATION: BUY
TARGET PRICE: RS.109
FY12E P/E: 5.0X
q Unity Infraprojects revenues reported 11.% growth for Q3FY11 vis-à-vis
same period last year. This was better than our estimates.
q Operating margin stood at 12.4% vs 12.6% for Q3FY10
q Though net profits reported a decline of 8% YoY but it was inline with
our estimates. It was impacted by increase in interest outgo as well as
bank guarantees.
q We tweak our estimates to factor in lower than expected order inflow
and higher borrowings and expect revenues to grow at a CAGR of 14%
and profits to grow at a CAGR of 6% between FY10-FY12.
q However due to lower than expected order inflow for the company, we
reduce the valuation for the core business to 7.5x FY12 estimates as
against 9x FY12 estimates earlier. Unity has so far invested Rs 1.96 bn in
the real estate venture and we thus assign P/BV of 1x for projects in
Nagpur, Pune and Goa.
q At current price of Rs 65, stock is trading at 5.4x and 5.0x P/E multiples
for FY11 and FY12 respectively. We thus arrive at a revised price target of
Rs 109 on FY12 estimates (Rs 135 earlier). We maintain BUY on the stock.
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UNITY INFRAPROJECTS LTD
RECOMMENDATION: BUY
TARGET PRICE: RS.109
FY12E P/E: 5.0X
q Unity Infraprojects revenues reported 11.% growth for Q3FY11 vis-à-vis
same period last year. This was better than our estimates.
q Operating margin stood at 12.4% vs 12.6% for Q3FY10
q Though net profits reported a decline of 8% YoY but it was inline with
our estimates. It was impacted by increase in interest outgo as well as
bank guarantees.
q We tweak our estimates to factor in lower than expected order inflow
and higher borrowings and expect revenues to grow at a CAGR of 14%
and profits to grow at a CAGR of 6% between FY10-FY12.
q However due to lower than expected order inflow for the company, we
reduce the valuation for the core business to 7.5x FY12 estimates as
against 9x FY12 estimates earlier. Unity has so far invested Rs 1.96 bn in
the real estate venture and we thus assign P/BV of 1x for projects in
Nagpur, Pune and Goa.
q At current price of Rs 65, stock is trading at 5.4x and 5.0x P/E multiples
for FY11 and FY12 respectively. We thus arrive at a revised price target of
Rs 109 on FY12 estimates (Rs 135 earlier). We maintain BUY on the stock.
19 February 2011
Buy Unity Infraprojects; Target :Rs69:: ICICI Securities,
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Unity Infraprojects:: Results below expectation…
Unity Infraprojects’ (Unity) Q3FY11 results were below our estimates
due to i) extended monsoon and ii) ban on sand mining in the coastal
region of Maharashtra. OPM at 12.4% was marginally lower than our
estimates of 12.8% due to lower absorption of overhead due to slower
execution and rising commodity pressure. Order inflow sluggishness is
a major concern for Unity with order intake of | 1,227 crore in 9MFY11
vs. | 2,260 crore in FY10. Unity’s order book currently stands at | 3573
crore, 2.2x TTM order book to bill ratio. While revenue visibility remains
low indicating muted earning growth, we have maintained our BUY
rating due to attractive valuation and better return ratios than its peers.
India Equity Research Reports, IPO and Stock News
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Unity Infraprojects:: Results below expectation…
Unity Infraprojects’ (Unity) Q3FY11 results were below our estimates
due to i) extended monsoon and ii) ban on sand mining in the coastal
region of Maharashtra. OPM at 12.4% was marginally lower than our
estimates of 12.8% due to lower absorption of overhead due to slower
execution and rising commodity pressure. Order inflow sluggishness is
a major concern for Unity with order intake of | 1,227 crore in 9MFY11
vs. | 2,260 crore in FY10. Unity’s order book currently stands at | 3573
crore, 2.2x TTM order book to bill ratio. While revenue visibility remains
low indicating muted earning growth, we have maintained our BUY
rating due to attractive valuation and better return ratios than its peers.
15 February 2011
UNITY INFRAPROJECTS :: IDFC Emerging Stars Conference
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UNITY INFRAPROJECTS
UNRATED (RS63, MCAP: RS4.7BN / US$103M
• Unity Infraprojects is a fast-growing construction company that has benefited from the large infrastructure
development opportunity in India across sectors, including roads, airports and irrigation.
• Some showcase projects completed by Unity Infraprojects include structural works for Terminal 1B at Mumbai
Airport (as part of modernization of the airport under private developer GVK), and construction of the Major
Dhyanchand National hockey stadium for the recently held Commonwealth Games in New Delhi.
• Unity has order backlog of Rs39.6bn (unadjusted for 3QFY11 revenues) as of January 2011. About 48% of the backlog
consists of civil works, while water (46%) and transportation (6%) constitute the rest. The company received order
inflows of Rs11.44bn in 9MFY11 and is an L1 bidder for Rs3bn worth of orders.
• The company is the highest bidder for a road project in Rajasthan (offered by the state PWD) to be developed on BOT
(toll) basis. The project is a 74km long 2-laning project and is valued at Rs1.5bn. The concession period is 25 years,
including a construction timeline of 2.5 years. The project entails a Rs190m grant from the state government.
• Unity is looking to focus on state highway projects to develop its asset portfolio. Accordingly, it is looking to tie up
with a European company to bid for NHAI projects.
• The management has indicated that the construction business is undergoing a strenuous phase currently due to
following reasons:
o The government apparatus appears to have virtually reached a state of ‘paralysis’. Major project announcements
are not being followed up with sufficient activity that would lead to construction on the ground
o Very few decisions are being taken by the government with regards infrastructure, which has led to a slowdown
in order inflows
o Therefore, lot of construction capacity across the country is lying idle
o Specific regions are facing their own unique set of challenges; e.g., work in Maharashtra, including Mumbai, has
been affected by a ban on sand dredging
o Average interest rates have increased by 1% over the past four months, leading to higher interest costs.
India Equity Research Reports, IPO and Stock News
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UNITY INFRAPROJECTS
UNRATED (RS63, MCAP: RS4.7BN / US$103M
• Unity Infraprojects is a fast-growing construction company that has benefited from the large infrastructure
development opportunity in India across sectors, including roads, airports and irrigation.
• Some showcase projects completed by Unity Infraprojects include structural works for Terminal 1B at Mumbai
Airport (as part of modernization of the airport under private developer GVK), and construction of the Major
Dhyanchand National hockey stadium for the recently held Commonwealth Games in New Delhi.
• Unity has order backlog of Rs39.6bn (unadjusted for 3QFY11 revenues) as of January 2011. About 48% of the backlog
consists of civil works, while water (46%) and transportation (6%) constitute the rest. The company received order
inflows of Rs11.44bn in 9MFY11 and is an L1 bidder for Rs3bn worth of orders.
• The company is the highest bidder for a road project in Rajasthan (offered by the state PWD) to be developed on BOT
(toll) basis. The project is a 74km long 2-laning project and is valued at Rs1.5bn. The concession period is 25 years,
including a construction timeline of 2.5 years. The project entails a Rs190m grant from the state government.
• Unity is looking to focus on state highway projects to develop its asset portfolio. Accordingly, it is looking to tie up
with a European company to bid for NHAI projects.
• The management has indicated that the construction business is undergoing a strenuous phase currently due to
following reasons:
o The government apparatus appears to have virtually reached a state of ‘paralysis’. Major project announcements
are not being followed up with sufficient activity that would lead to construction on the ground
o Very few decisions are being taken by the government with regards infrastructure, which has led to a slowdown
in order inflows
o Therefore, lot of construction capacity across the country is lying idle
o Specific regions are facing their own unique set of challenges; e.g., work in Maharashtra, including Mumbai, has
been affected by a ban on sand dredging
o Average interest rates have increased by 1% over the past four months, leading to higher interest costs.
21 January 2011
Conference Call Update - Buy Unity Infraprojects :Sushil Research
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We recently had a conference call with Mr.Madhav Nadkarni (CFO) of Unity Infra in order to
discuss the current and future developments of the Company. The following are the key
highlights of the conference call:
• Unity has a healthy order‐book position of ~Rs.38.4 bn (~2.5x FY10 Revenues) which is
executable over a period of 27‐30 months (except for tunnel project worth Rs.5.7 bn).
Apart from above, the Company has L1 position in contracts worth Rs.3 bn and has
outstanding bids to the tune of Rs.50‐60 bn. YTD order inflows stood at Rs.10 bn which
are lower than our expectations. However the management expects the order inflows
to the tune of ~Rs.10 bn in next 2 quarters.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
We recently had a conference call with Mr.Madhav Nadkarni (CFO) of Unity Infra in order to
discuss the current and future developments of the Company. The following are the key
highlights of the conference call:
• Unity has a healthy order‐book position of ~Rs.38.4 bn (~2.5x FY10 Revenues) which is
executable over a period of 27‐30 months (except for tunnel project worth Rs.5.7 bn).
Apart from above, the Company has L1 position in contracts worth Rs.3 bn and has
outstanding bids to the tune of Rs.50‐60 bn. YTD order inflows stood at Rs.10 bn which
are lower than our expectations. However the management expects the order inflows
to the tune of ~Rs.10 bn in next 2 quarters.
20 December 2010
Unity Infra Projects: Buy TP Rs 135:: Kotak Sec
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UNITY INFRAPROJECTS LTD
PRICE: RS.86
RECOMMENDATION: BUY
TARGET PRICE: RS.135
FY12E P/E: 6.0X
q Order inflow still subdued; though management believed that it will
improve in the coming quarter
q Margin scenario will continue to remain strong
q Based on lower than expected order inflow till date in FY11, we reduce
our order inflow estimates going forward and arrive at a revised price
target of Rs.135 on FY12 estimates (Rs 153 earlier)
q We continue to maintain BUY recommendation on the stock.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
UNITY INFRAPROJECTS LTD
PRICE: RS.86
RECOMMENDATION: BUY
TARGET PRICE: RS.135
FY12E P/E: 6.0X
q Order inflow still subdued; though management believed that it will
improve in the coming quarter
q Margin scenario will continue to remain strong
q Based on lower than expected order inflow till date in FY11, we reduce
our order inflow estimates going forward and arrive at a revised price
target of Rs.135 on FY12 estimates (Rs 153 earlier)
q We continue to maintain BUY recommendation on the stock.
19 November 2010
Unity Infraprojects:Results in line, order inflow key monitorable: ICICI Sec
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Unity Infraprojects
Results in line, order inflow key monitorable…
Unity Infraprojects’ (Unity) Q2FY11 results were largely in line with our
estimates. The company’s revenues grew slower at 14% YoY to | 346.1
crore mainly due to prolonged monsoons (revenue loss of | 20-30 crore).
The EBITDA margin at 14.2% was better than our expectation of 13.4%
due to favourable revenue mix (~50% revenues derived from irrigation
and water projects). The company currently has an order book of |
3,636 crore implying order book to bill ratio of 2.3x (on TTM basis).
Additionally, Unity is currently L-1 bidder for projects worth | 500 crore.
Going ahead, the order inflow would be a key monitorable for Unity as
the company has bagged order inflows of ~| 850 crore YTD (vs. | 2260
crore in FY10). We maintain our BUY recommendation on the stock with
a revised target price of | 127 per share.
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