Prabhudas Lilladher is bullish on Capacite's Infraprojects has recommended buy rating on the stock with a target price of Rs 162 in its research report dated November 12, 2020.
Prabhudas Lilladher's research report on Capacite's Infraprojects
CAPACITE posted a decent set of results with revenues falling 55% YoY due to gradual recovery seen in labour availability in Q2 and overall prolonged impact of pandemic in MMR region. However, currently all project sites have commenced operations with cumulative labour force already above pre-covid levels. With its largest project CIDCO (Rs45bn) moving to full-fledged execution stage (with a peak potential monthly run-rate of Rs1bn in FY22), strong momentum in private sector order book, healthy collections (Rs3.6bn in Q2) and overall traction in the real estate sector (especially MMR), the company is poised for a strong H2FY21E and even stronger FY22E. We believe that CAPACITE is well-positioned to gain traction driven by a) impressive execution track record with stable margins; b) healthy order book (Rs98.7bn as on 2QFY21, excluding MHADA orders) c) lean balance sheet with healthy return ratios; d) strong management pedigree; and e) asset-light business model.
At CMP, the stock trades at a PE of 75x/ 7.1x FY21E/ FY22E earnings. We maintain BUY rating with TP of Rs162 (Same as earlier).
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