Hold Ceigall India: target of Rs 256: ICICI Securities

ICICI Securities's research report on Ceigall India

Ceigall India (Ceigall) reported a muted Q1FY26 with revenue increasing by 6% YoY to INR 8bn – lower than estimates on account of early monsoons and an extended delay in receiving the appointed date for its four HAM projects (46% of order book). Further, margins receded 359bps YoY to 11.4% (albeit within the guided range of 11–12%). As a result, EBITDA declined 19% YoY to INR 0.9bn. Further, order inflow (OI) remained weak during the quarter with only a small order (L1) within the T&D space, while the cancellation of the Bhubaneswar metro project further shrunk its OB to INR 94bn. On a positive note, the outlook for the road tendering activity remains bright supported by NHAI’s strong bidding target of INR 3.4trn in FY26. We maintain our HOLD rating on the stock with a TP of INR 256.

Outlook

We maintain our HOLD rating, valuing the EPC business at 8x FY27E earnings and the HAM segment at 1.2x equity invested, arriving at a TP of INR 256.