Moneycontrol
Feb 17, 2017 02:43 PM IST | Source: Moneycontrol.com

Buy Simplex Infrastructure; target of Rs 365: ICICI Direct

ICICI Direct is bullish on Simplex Infrastructure has recommended buy rating on the stock with a target price of Rs 365 in its research report dated February 16, 2017.

Buy Simplex Infrastructure; target of Rs 365: ICICI Direct


ICICI Direct's research report on Simplex Infrastructure


Simplex Infrastructure (SIL) reported Q3FY17 results, which were marginally below our estimates on the topline and bottomline front while in line on the EBITDA margin front. Topline de-grew 1.8% YoY to Rs 1377.7 crore (our estimate: Rs 1468.2 crore) due to stretched working capital causing muted execution.


Outlook


In our view, SIL would be a key beneficiary of government’s focus on infrastructure development coupled with cabinet’s move to boost liquidity in the sector. Hence, we maintain our BUY recommendation on the stock with a target price of Rs 365/share. We have valued its EPC business at Rs 346/share (at 6.5x FY18E EV/EBITDA).

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