Punj Lloyd Ltd - Next milestone pending, Retain Accumulate - Emkay

Reco: ACCUMULATE
CMP: Rs 54
Target Price: Rs 74

- Strong operating performance with revenue growth at 23% yoy and EBITDA margins at 10.4% (+160 bps yoy) - negated by high interest costs. Net loss at Rs134 mn.

- Though operations stabilizing, investor overhang remains on rising debt - Debt increases sharply by 28% yoy to Rs57.0 bn; Net DER rises to 1.5X.

- Punj commences operations in Libya on projects in hydrocarbon sector; Re-negotiating projects in infrastructure space. Auditors remove emphasis of matter worth Rs5.9 bn.

- Investor concerns recede; But concerns exist on operating & free cash flow, low ROE and high DER. Retain Accumulate rating with a target of Rs74.

Source : Equity Bulls

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