Prabhudas Lilladher has maintained buy rating on Nagarjuna Construction with target price of Rs 297 implying upside potentail of 40%. We have however reduced downwards our SOTP target from Rs 396/share to Rs 297
Prabhudas Lilladher has maintained buy rating on Nagarjuna Construction with target price of Rs 297 implying upside potentail of 40% in its March 25, 2008 research report. "Due to nonavailability of right of way for two road projects in UP and a building project in Bangalore, we had previously revised downwards our revenue estimate to Rs36.4bn. The management has now assured that the land has been made available and the projects are under execution. Given the 32% revenue and 37% profit CAGR, well diversified skill set and strong outlook on order inflows, we maintain BUY on NCC. We have however reduced downwards our SOTP target from Rs 396/share to Rs 297, as we cut our target multiple for its core business from 26x to 21x FY09E EPS. We are valuing its BOT portfolio at Rs17/share, its real estates ventures (executed by NCC Urban) at Rs20/share and its share of the Telapur Township, which is at 30% discount to NAV of these projects, at Rs 26/share," says Prabhudas Lilladher research report.
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