MBL Infrastructures - 4QFY2015 Result Update - Angel Broking

For 4QFY2015, MBL Infrastructures (MBL) reported numbers below our expectations. On the top-line (standalone) front, it reported a 9.2% yoy growth to Rs. 552cr. On a sequential basis, the top-line grew by 2.5%. On the EBITDA margin front, MBL impressed us by reporting an 187bp yoy expansion to 10.5% for 4QFY2015E. Surge in yoy EBITDA margins is mainly on account of decline in raw material costs, although the decline has been slight. Despite EBITDA growth, PAT declined by 36.0% yoy to Rs. 14cr, on account of higher interest (on account of stretch in Working Capital cycle) and tax expenses.

MBL's unexecuted order book as of 4QFY2015E stands at ~Rs. 2,872cr, which gives revenue visibility for over the next 4-5 quarters.

With 3 BOT projects to commence tolling in FY2016 and the 4th to commence tolling in FY2017s, and with the management clarifying that it does not intend to add any new BOT projects to the company's portfolio till FY2017, we are confident that MBL's D/E ratio would peak out in FY2016-17.

Outlook and valuation: Considering the strong market positioning within Roads & Highways EPC vertical, better prospects of award activity from here-on and company's strong execution capabilities, we are of the view that the standalone entity would report ~18% and ~16% top-line and bottom-line CAGR, respectively, during FY2014-2017. This, coupled with the likelihood of all 4 BOT projects commencing operations in FY2016-17, leads us to estimate that the consolidated Balance Sheet should peak during FY2016-17, which is better in comparison to some of its peers. Using SoTP based valuation methodology we arrive at FY2017E based price target of Rs. 789. Given the upside potential, we maintain our Buy rating on the stock.

Shares of MBL Infrastructures Ltd was last trading in BSE at Rs.518.25 as compared to the previous close of Rs. 509.75. The total number of shares traded during the day was 3259 in over 250 trades.

The stock hit an intraday high of Rs. 526 and intraday low of 510. The net turnover during the day was Rs. 1684420.

Source : Equity Bulls

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