Accumulate J Kumar Infraprojects: Prakash Diwan

Prakash Diwan of Altamount Capital Management told CNBC-TV18, "If you look at the kind of take off on capex from the government side it is primarily public utilities and the soft infrastructure that the government has started spending on. Companies which are in that space have already seen a huge interest come up otherwise like Madhucon Projects and Ahluwalia Contracts have started getting into that momentum and activity."

"J Kumar Infraprojects specialises in transportation engineering work which means anything to do with roads, flyovers and stuff like that and that is why they were very prominent in large cities. In fact they have started gaining orders from the metro railways also which is the big thing. Ahmedabad is a first big project that they have just landed for themselves. It is a diversification for the company beyond Maharashtra where they were all the time focused, so they have gone into Gujarat, they have gone into Rajasthan. Geographical diversification helping them quite a bit in terms of the de-risking themselves from any kind of political turbulence," he said.

"Interestingly it is a company which has one of the lowest debt equity ratios among its peers including the likes of ITD Cementation, Simplex Projects and Sadbhav Engineering. It has got enough headroom to participate in lot of new activity which the government tenders for and what I feel is that this company have executed things very well. The cash flows have been very good, the efficiencies that they managed have decent margins in a business which otherwise is really tough to operate. Their order book is actually 3 times of sales already, it is at about Rs 4,000 crore plus. So if they were to execute even half of what they have as an order book in the next couple of years you would see at least a 33 percent growth in sales every year for the next three years. It has definitely got the matrix in its favour."

He further added, "What I feel is that the company is going to benefit out of this that it should be able to scale up because of the new geographical expansion that it has done. It started getting projects like sports complex, for example Goregaon Sports Complex in Mumbai is being built by them. So it is a new activity which they have altogether landed themselves in. It is competing with ITD Cementation India and Rigging Corp in a lot of tenders also where there is piling work. The stock has actually come down a bit, 10 percent from its 52-week high recently. So these are the times when you can start accumulating and look for may be a triple digit or four digit targets very soon."