Buy PSP Projects; target of Rs 639: HDFC Securities

HDFC Securities' research report on PSP Projects

PSP’s  4QFY18  revenue  was  in-line with our estimates of Rs 2.6bn. Higher than  expected EBITDA margins led to EBIDTA/PAT beat of 25.5/23.3%. Balance sheet continues to remain healthy with net cash/equity of 0.7x. Bid  pipeline  of  Rs 20bn is strong with PSP targeting close to Rs 10bn of order  inflows  in  FY19E. PSP has bid for Rs 10bn of commercial project in Southern India and other projects with cumulative value of Rs 10bn projects in  Gujarat.

Outlook

We expect an increase in investments in office space and  retail  to continue to drive institutional construction along with FDI and  manufacturing activity aiding industrial construction. We maintain BUY on PSP with TP of Rs 639/sh (18x Mar-20E EPS). For all recommendations report, click here

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