Buy Sadbhav Engg; target of Rs 360: Religare

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Religare's research report on Sadbhav EnggSADE posted weak Q4 standalone results (revenue/EBITDA: Rs 8.6bn/ Rs 814mn; -11%/-15% YoY) even as adj. PAT grew 28% due to tax reversals. Order book at FY16-end stood at Rs 75bn, excluding L1 position in orders worth Rs 11.4bn. The company witnessed ~7-8% average traffic growth across its BOT assets. We remain convinced of SADE’s contracting capabilities and expect the company’s cash flow generation to improve over the next two years. Maintain BUY with a Mar’17 TP of Rs 360.We value the EPC business at 7.5x-FY18E EBITDA or Rs 165/sh and BOT assets (FCFE-based valuation) at Rs 195/sh. Maintain BUY with a Mar’17 TP of Rs 360.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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