Buy PSP Projects; target of Rs 639: HDFC Securities

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HDFC Securities' research report on PSP Projects

PSP’s 1QFY19 revenue of Rs 2.3bn (+50.6%YoY, -11.0% QoQ) was largely driven by the SDB project (~Rs 830mn). EBITDA margin came in at 14%, about 100bps higher than management guidance. Change in project mix (SDB still in initial stage where material cost is significantly higher than labour) was key reason.

Outlook

PSP may bid for Education Institutions IIT/IIMs. We expect PSP’s order book/APAT to grow ~1.2/2.0x over FY18-20E. We maintain a BUY with a TP of Rs 639/sh (18x Mar-20E EPS).

For all recommendations report, click here

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