JMC Project (JMC) reported revenue/EBITDA/APAT at Rs 8/0.7/0.1bn, missing our estimates by 10/22/73%. While miss in revenue is attributable to lower labour productivity, EBITDA margin was impacted by adverse job mix, leading to 82% YoY decline in APAT. However, with FY21YTD order inflow of Rs 60.3bn, JMC surpassed its annual guidance of Rs 60bn. Order book now stands at Rs 146bn. Despite the slower-than-expected recovery, we remain constructive on JMC, given (1) healthy order book (~4x FY20 revenue), (2) improved labour availability and (3) comfortable balance sheet (net D/E 0.86x).
OutlookReiterate BUY with an unchanged target price of Rs 88. Key risks: (1) delay in restructuring/monetisation of BOT assets and (2) increase in leverage.
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