Buy Capacite Infraprojects; target of Rs 147: YES Securities

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26 Aug, 2025 12:21

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YES Securities' research report on Capacite Infraprojects

It was a washout quarter for Capacite Infraprojects Ltd (CIL) with revenue declining 94% yoy (to Rs.237 mn) during Q1 FY21. The execution was severely impacted due to COVID-19 related shutdown with severe disruption in labor/raw material availability. The company’s profitability got impacted with almost nil revenues and continued fixed costs. The order book remained healthy at Rs.103.9bn (~9x TTM revenues). After major disruptions in Q1 FY21, the company has been able to restart execution on 32 sites (constitutes 90% of order book) with increasing labor availability, easing of lockdown and government permissions to start operations. The management expects normalcy from Q3 FY21. Labour strength is increasing gradually and the count of workmen at various sites currently stood at ~4,000 (vis-à-vis ~2,500 in Jun’20-end). The management expects workmen count to increase further to 5,000+ by Aug’20-end, sufficient for normalized operations. With significant impact of COVID on topline and margins, we cut our estimates for FY21. We believe, normalcy would only return from Oct’20 onwards. We expect revenues and margins to improve in FY22 as execution picks up.

Outlook

We believe, the comfortable balance sheet position would help execute the strong order book. We maintain our BUY rating on the stock for target of Rs.147 (9x FY22 EPS).

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