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Posted by :
stocktobuyaccumlate unity ifrastructure.. valuation is quite cheap ...
unity infraprojects
Posted by : stocktobuyi recommend buy unity infra projects...
buy Unity Infraprojects !!
Posted by : alfsrequalsource:THE HINDU BUSINESSLINE DATED 15 11 2009...
buy Unity Infraprojects !!
Posted by : alfsrequal
Investors with a two-three-year perspective can buy the stock of Unity Infraprojects (Unity). Primarily a construction contractor, Unity’s project portfolio comprises infrastructure and civil contracts. At Rs 479, the stock trades at 8.8 times its trailing 12 month per share earnings, at a discount to peers such as Ahluwalia Contracts and Patel Engineering.
Trading well below its IPO price in 2006, the company now asks for far more reasonable valuations. Besides, a diverse and growing order-book, increase in infrastructure contracts, and steady margins have improved its earnings prospects over the last couple of years.
order composition
Order-book size has almost doubled in the first half of FY-10 to Rs 4,040 crore, up from the 12 per cent growth of FY-09, indicating increasing ability to secure a larger number of contracts. At 39 per cent, civil contracts spanning townships, hospitals, airports, commercial and residential buildings, make for the bulk of the order book. 15 per cent comes from the transportation space, where the company undertakes construction contracts for road widening, micro tunnelling and road development. Water supply and irrigation contracts account for the balance. The order book, at 3.1 times FY-09 sales, has an average execution period of around 30 months, allowing medium-term earnings visibility. There is also an almost even split maintained between private and government contracts over the past three years allowing the spreading of risk while maintaining the ability to capitalise on opportunities thrown up by both segments.
Contribution of civil contracts has reduced in favour of those in the infrastructure space; transportation made up a mere 5 per cent of the order-book in FY-07. This segment, especially micro tunnelling , may see more activity in the coming quarters and help support profit margins.
The company will remain focussed on urban infrastructure; schemes such as JNNURM leave ample opportunities. Unity will also move into electrical contracts.
Combined bids
Unity does not have projects on a build-operate-transfer (BOT) model. Instead, it bids in consortium with developers as a preferred engineering procurement construction (EPC) contractor. It, however, does not have in-house design capability and outsources the same. Unity also undertakes projects on a joint-venture basis, securing last week an Rs 1145-crore water supply tunnel project with IVRCL Infrastructures and Projects.
Such partnering with varied developers, while helping the company secure larger orders or enter new geographical areas, may eventually provide it with technical qualification to bid on its own. The company has earlier partnered Nagarjuna Constructions, Patel Engineering and Pratibha Industries, among others. Unity also has interests in real-estate development which is not a significant contributor to revenues and plans to go slow on these projects.
Maintained margins
Compounded annual growth rate of sales and net profits over a three-year period stand at 85 and 84 per cent respectively. The company kept up sales growth of 28 per cent for the first half of FY-10 compared with the same period in FY-09. Net profits similarly increased 11 per cent.
Operating margins have hovered around 14 per cent over the past three years and into the first half this year as well. With price escalation clauses in 85 per cent of the contracts, the company appears to be able to maintain margins at this level.
Debt on books has seen massive increases, standing at Rs 432 crore as of March ’09 against Rs 90 crore seen two years ago; interest costs almost doubled in FY-09 over FY-08. Gross margins are, thus, left at 10.6 per cent for FY-09 against the 11.6 and 12.4 per cent in FY-08 and FY-07. Margins have remained lower in the first half of FY-10 than the same period in FY-09.
However, share of interest costs in sales has remained at 2.5 to 3 per cent, suggesting debt has helped generate sales.
Net profit margins were 6.2 per cent for FY-09, down 100 basis points from that in FY-08, slipping to 6 per cent for the first half of this year. The company can raise up to Rs 250 crore through a Qualified Institutional Placement issue; if undertaken, it could help trim debt and boost margins.
Concerns
Given the sluggish climate of FY-09, some projects have been delayed, albeit no outright cancellation of projects. The company is also highly concentrated in the West, primarily in Maharashtra and Mumbai with close to 58 per cent of contracts in the west.
source :...
buy call
Posted by :
mohankumar1000
Investors with a two-three-year perspective can buy the stock of Unity Infraprojects (Unity). Primarily a construction contractor, Unity’s project portfolio comprises infrastructure and civil contracts. At Rs 479, the stock trades at 8.8 times its trailing 12 month per share earnings, at a discount to peers such as Ahluwalia Contracts and Patel Engineering.
Trading well below its IPO price in 2006, the company now asks for far more reasonable valuations. Besides, a diverse and growing order-book, increase in infrastructure contracts, and steady margins have improved its earnings prospects over the last couple of years
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Rs 2 trillion worth of projects to be awarded !!
Posted by : alfsrequal
Goods and services could soon be cheaper. The Transport Ministry is looking to award contracts for 10 mega highways over the next two years, with each highway running an average distance of over 1,000 kms. These mega highways are expected to be a boon to the Indian economy giving a fillip to India`s infrastructure and help cut down the time and cost of transporting goods. While the main barrier to Kamal Nath`s pet project will be acquiring land, steps are being taken by the government to expedite the acquisition so that the project can start on time. With Rs 2 trillion worth of projects to be awarded in the next two years, infrastructure companies are also expected to benefit.
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Unity Infraprojects has given bullish pattern, target 611
Posted by :
the-new-analystUnity Infraprojects has given bullish pattern, target 611, time 1.5 month, stop loss 460...
Heading towards 500
Posted by : RaniThe IPO price was 675 in May 2006. It will take a quarter or so to touch it. Todays sudden spurt is a step in this direction....
Ravi
Posted by :
Shyam Iyer
I see good buying build-up on this stock, but 2K is a very long way.
Its near to impossible - the EPS should increase thrice to achive something even close to that....
More than Rs.300 book value and above 50 EPS definitely deserve the price in four digits...
what r the reasons of your bullish view on unity.2000 is way off....
Dear Ravi, Pl. note that Unity infra will touch Rs.2000/- (at least) within next 6 months. This is my statement and pl. confirm the same in the month of APril`10.
Regards....
Unity Q2 results.
Posted by : mohankumar1000
dear shyam,
can you have a look at pss5588 sir`s home page and check up his profile?think you will find the answer there...
Unity Q2 results.
Posted by : Shyam IyerI have 300 shares @ an avg. purchase price of 82/- Since this stock will be range bound shall I book profits - atleast part of it....
Unity Infra, in JV IVRCL Infra, bagged a contract
Posted by : Guestwith such good news & market shooting up today, why is this scrip down?...
