Ramky Infra can move to Rs 300: SP Tulsian

Ramky Infrastructure can move to Rs 300 in next 6 months, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "In Ramky Infra if you see the rise which has happened in maybe last two-three days, it has risen by about 15%. But I am still maintaining my positive view on the stock largely because in the last couple of months, we have seen the company bagging orders of about Rs 4,000 crore."
He further added, "The best part about the company is that a couple of years ago when the company went public, their concentration was more into the southern four states with strong dominance in Andhra Pradesh. But now, the things have changed rapidly and the total order book of about Rs 14,300 crore as on date is spread across 22 states and two union territories. So I think the pain of concentration or the disadvantages of concentration have been realized by the management."
"Since they have their competence in the infrastructure space like waste-water management, construction, road, SEZ and all sorts of things, they thought of expanding their construction and contracting engineering scale to other states. Apart from that, they have presence in real estate development in SEZ in the southern part of India where things are not catching up so well, but at least the valuations are not taking a hit beyond a point."
"Now if you come on the financial performance for FY11, the company posted an EPS of about Rs 36. I think that the same kind of EPS is likely to get maintained for FY12. In fact, if any contracting or construction companies have been able to keep the EPS intact at the FY11 level, I think that is credible because for the first half, the topline is about Rs 1500 crore with EPS of close to Rs 16."
"So if you take this scenario of Rs 14,000 crore, some of the water projects have a span of four-five years. They cannot get completed in two-three years. So they are likely to see a topline of at least Rs 4000-4500 crore for FY13 which are likely to gradually increase every year by about 18-20%. A matching improvement or increase in the bottom line will also be seen."
"On the shareholding front, 2/3rd of the low equity base is held by the promoters, about 27-28% is held by institutional investors and HNIs. If you take all this into consideration, and even the debt which has been the main problem for all these companies - that debt of Rs 1500 crore there is in the books of the company is largely for the working capital because nothing has been availed by the company for fixed assets or for acquiring real estate. That is again a good part that the working capital burden considering the topline of Rs 3000 crore, Rs 1500 crore is not so significant."
"So I am maintaining quite a positive view on the stock. I am expecting that shares should probably be able to move to Rs 300 in next six months. But if somebody can keep a view of about maybe for next two years, they can expect a return of 30% every year."