So even if they bag new projects which are heavy on lump sum turnkey projects, I guess execution of CNE sort of projects would be dominant over the next two years. Hence margins would more or less will be capped from here.
You will probably see a profit level growth of around 22% CAGR over the next two years. That should value the company at the lower band at close to around 16.5-17 times on PE and around 8.5 times on EV EBTIDA.
If you look at some of the players in the industry like L&T or Punj or perhaps some of the foreign global players like Alstom they are trading in similar sort of range. As I said, valuations at this point of time at the lower band would look slightly attractive rather than at the higher band but since we don't have a clarity of now as to what the cash that they are holding on to would be utilised for, that perhaps might be a key trigger in deciding the growth premium as to where this stock goes from here.
But as of now on basis of their current business model, we would sort of favouring it around Rs 310-315 price for the company.
