Buy Capacite Infraprojects; target of Rs 213: HDFC Securities

HDFC Securities' research report on Capacite Infraprojects

CIL reported a revenue of Rs 1.8bn, an 18% miss on our estimates. PAT was broadly in line owing to higher EBITDA margin (21.5%). About Rs 100mn EBITDA delta came from CIDCO project design revenue booking. Margins are expected to revert to ~17-18%. We believe that the worst is over for CIL as we foresee MoM/QoQ execution ramp-up. CIL is well-placed for cyclical recovery on the back of robust order backlog (6.4x FY20 revenue). The order book is well balanced between Public/Private at 55:45. The balance sheet is stable, labour availability has improved to ~100%, and all sites have restarted. 2/7 of the remaining sites of the CIDCO project (43% of order book) have been handed over.

Outlook

We maintain BUY with Rs 213/sh target price.