Accumulate Era Infra Engineering: Prabhudas Lilladher

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Accumulate Era Infra Engineering: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Era Infra Engineering and has recommended accumulate rating on the stock with a target of Rs 242, in its November 15, 2010 research report.

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Prabhudas Lilladher is bullish on Era Infra Engineering and has recommended accumulate rating on the stock with a target of Rs 242, in its November 15, 2010 research report.

"Era Infra Engineering (EIE) has clocked a top - line of Rs 8.1billion for Q2FY11, registering a de - growth of 3% YoY. EBITDA margins have improved by 290bps YoY on account of better project mix and absence of trading income. However, interest cost has substantially increased by 20% YoY to Rs 736 million on account of an increase in the debt levels. PAT grew by 4.9% YoY at Rs 618 million."

"Current order book stands close to Rs 110 billion (Q1FY11 order book at Rs 106 billion). Of the total order book: Power - 22%, Infra - 58% and Industrial and Social Infra - 20%. Out of the total order book, Rs 45 billion are captive orders from the BOT space. EIE would be incurring a capex of Rs 2.5 billion for the Equipment division in FY11 and Equity requirement for BOTs would be close to Rs 1.5 billion. The company has achieved financial closure of Haridwar and Dehradun BOT projects. The total asset capitalisation of these projects is close to Rs 17 billion. EIE is expected to achieve COD of the earlier BOT project by Q4FY11."

"We have downgraded our estimates factoring a delay in captive projects and completion of Common Wealth Games projects. At CMP of Rs 228, the stock discounts FY11E earnings by 13x and FY12E earnings by 11.2x core earnings, respectively. We maintain 'Accumulate' on the stock with a target price of Rs 242," says Prabhudas Lilladher research report.

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