J Kumar Infraprojects - Q3FY13 Result Update - Kantilal Chhaganlal

In Q3FY13, J Kumar Infraprojects Ltd (JKIL) registered a revenue of Rs. 2558.8 mn, which remained subdued with the marginal growth of 2.1% on Y-o-Y basis, however it has grown by 18.8% on sequential basis. For 9MFY13, the revenue has grown by to Rs. 6.5% on Y-o-Y basis.

- During the quarter JKIL's EBITDA margin shown significant improvement of 90bps to 16.9% but on sequential basis it declined by 40bps. For 9MFY13, the EBITDA margin improved by 90bps on Y-o-Y basis to 16.8%.

- In Q3FY13, JKIL reported a net profit of Rs. 196.6 mn, with net profit margin of 7.7%, with a decline of 10bps on Y-o-Y basis. However, the EBITDA margin for 9MFY13 has improved by 40bps to 7.7% on Y-o-Y basis.

- JKIL's unexecuted order book remained subdued at Rs. 38948.9 mn as on Dec.2012 signally strong revenue visibility for next few years. However the order inflow during the quarter remained subdued but is expected to pick up in coming quarters backed by the governments steps to ease liquidity pressure and faster project approval. The company has L1 position in 3 orders worth Rs. 7010 Mn in 300 25 Mumbai as on date.

- The order book position of Rs. 38948.9 mn as on 31st Dec. 2012 includes 81.6% from transportation engineering (including flyover and roads), civil construction (15.2%), irrigation project (2.4%) and piling (0.8%).

Valuation

At CMP of Rs. 222/ share the stock is trading at 8.7x to its FY13E EPS of Rs. 25.4 and at 7.4x to its FY14E EPS of Rs. 29.9. We maintain our target price to Rs. 209.3 /share (which is at 7x P/E on FY14E EPS of Rs. 29.9) and maintain "Hold" rating on JKIL.

Source : Equity Bulls

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