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Subscribe to G R Infraprojects: Prabhudas Lilladher

Prabhudas Lilladher has come out with its report on G R Infraprojects. The research firm has recommended to ''Subscribe'' the ipo in its research report as on July 05, 2021.

July 05, 2021 / 12:12 PM IST
IPO (Representative image)

IPO (Representative image)

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Prabhudas Lilladher IPO report on G R Infraprojects

We recommend SUBSCRIBE rating on G R Infraprojects Limited (GRIL) IPO issue given a) strong pedigree management with excellent execution capabilities, b) lean balance sheet (standalone Net D/E: 0.3x), robust earnings growth (45% CAGR Over FY16-21) and c) well placed to capitalize huge opportunities in infra space (NIP of ~Rs111trn). GRIL has gradually emerged as an integrated road EPC player having successfully executed more than 100 road projects (since 2006) across 15 states with one of the fastest growth in order book (10x) over FY14-21. We are positive on the company given it’s a) comfortable order book (Rs190bn – 2.4x TTM revenues), b) robust bid pipeline with overall infra-push in the economy, c) stellar execution pace with most projects getting completed before/within stipulated time, d) geographical diversification, e) strong EBITDA & PAT margins (>24%/ >12% on consolidated basis over FY19-21) and f) controlled debt levels, respectively.

Valuation and Outlook

At upper end of the price band, this issue is valued at a P/E of 8.5x and an EV/EBITDA of 6.3x as on FY21 consolidated earnings (vs PL infra coverage at an average P/E of 19.6x/11.4x FY21/22E earnings). SUBSCRIBE.

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