Sharekhan's research report on Sadbhav Engineering
SEL reported weak execution during Q4FY2020, led by issues plaguing Right of Way in HAM projects and COVID-19 led lockdown. Adjusted for exceptional gain, SEL posted standalone net loss. Management expects to revert to normal quarterly revenue run-rate from Q3FY2021 and strong jump in revenue in FY2022. Stake sale in assets leads to meaningful de-leveraging. Merger of SIPL with SEL isexpected to complete by March 2021. Receives appointed dates for all HAM projects.
Outlook
We maintain our Buy rating on Sadbhav Engineering Limited (SEL) with a revised PT of Rs. 75, factoring lower valuation of its listed subsidiary Sadbhav Infrastructure Projects Limited (SIPL).
Sadbhav Engineering 11072020-khan
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