Buy JMC Projects; target Rs 175: Sushil Finance

"JMC Projects India Limited (JMC), a subsidiary of Kalpataru Power Transmission Limited (KPTL), in one of the fast growing construction company of India. It is into the construction of Industrial, Power, Institutional and Infrastructural sector. During Q2FY12, its standalone revenues increased by 59.3% YoY to Rs. 4263.2 mn. In the same period, its EBIDTA increased by 39.5% YoY to Rs. 319.4 mn, while its EBIDTA margins decreased by 110 bps YoY to 7.5%. During the quarter, its APAT increased to Rs. 83.5 mn, registering a growth of 55.2% YoY. It registered an AEPS of Rs. 3.2 for Q2FY12."

"During H1FY12, the Company’s standalone revenues increased by 51.5% to Rs.8026.9 mn, its EBIDTA increased by 37.5% to Rs. 617.6 mn, while the EBIDTA margins were flattish at 7.7%, its APAT stood at Rs. 163.1 mn registering a growth of 51.2%. It registered an AEPS of Rs. 6.2 for H1FY12."

"JMC’s order book position outstanding as on March 31, 2011 stood Rs. 50 bn. The average execution period of the order book is around 24 months. In addition to its current order book, JMC is L1 in few orders which it expects to be finalized soon. The order inflow for the quarter (Q2FY12) was around Rs. 5.5 bn. Its order book of Rs. 50 bn  comprises of about 50% of factory & building projects, about 30% of infrastructure projects, around 20% of power projects & Railway Projects."

'JMC Projects is one of the leading construction companies in India. It is engaged into EPC projects with specialization in designing, testing and tower fabrication. JMC has a decent order book position & also has a strong order pipeline and is well placed to leverage its strengths & Kalpataru Group’s positioning in the infrastructure business."

"At the current market price of Rs.117, the stock is available at an attractive valuation of 7.2x its FY12E earnings of Rs.16.3 and 6x its FY13E earnings of Rs.19.5. We retain our “BUY” rating on the stock with a reduced price target of Rs.175 (9x FY13E earnings), says Sushil Finance research report.

Public holding more than 90% in Indian cos

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