HDFC Securities is bullish on JMC Projects has recommended buy rating on the stock with a target price of Rs 173 in its research report dated May 10, 2019.
HDFC Securities' research report on JMC Projects
4QFY19 Revenue was largely in-line at Rs 9.3bn (+29.7% YoY). With strong execution over the past 12 months, JMC has posted a robust 18% top line growth in FY19 (Rs 32.5bn). MP project is progressing well. Despite in line EBIDTA margins, 4QFY19 APAT at Rs 487mn was a strong 49% beat vs. our estimate, due to one-offs in depreciation and interest costs (~Rs 60mn). With Rs 10.6bn of new order inflows during 4QFY19 (Rs 56.3bn in FY19; 56% from Infra), the order book now stands at Rs 99.6bn (ex L1 of Rs 7bn, 3.1x FY19 revenue). JMC has guided for ~Rs 65bn inflows in FY20E (majorly during 2HFY20E; including Rs 16-20bn new orders from international markets).
We maintain BUY, with a reduced TP of Rs 173/sh (vs Rs 187/sh earlier). We have cut our target EPC multiple from 18x to 16x to factor in the debt build-up, delay in BOT monetization & increased Roads BOT shortfall funding.
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