2025-05-07 02:59:48
Latest Post
Godrej Consumer Products Limited declares interim dividend of Rs. 5 for FY2026
Jagsonpal Pharmaceuticals Limited recommends dividend of Rs. 2.5
Comfort Commotrade Limited recommends final dividend of Rs. 0.50
eMudhra Limited recommends final dividend of Rs. 1.25
Ador Welding Limited declares dividend of Rs. 20
Research
Buy ITD Cementation: Anandrathi Institutional Reseach
Posted On : 2015-12-22 19:43:21( TIMEZONE : IST )
ITD Cementation- Play on Indian urban infrastructure; Buy with a target price of Rs 136.
ITD Cementation is a strong play on growth in India's urban infrastructure and water space. Its recent strong orders, a better balance sheet and rebounding EBITDA margins would lead to a turnaround in the bottom line and better ratios. We initiate coverage on the company with a price target of Rs. 136 based on 15x CY17e earnings.
Order-book growth huge. A major operator in urban infra, marine and specialised projects, ITDC has a strong execution track record. Its order book, of ~Rs. 57.9bn on Sep'15 (2.3x TTM consol. revenue), provides strong revenue assurance over the next two years. Also, it has L1 status for projects of ~Rs. 23bn, besides the Mumbai metro project worth Rs. 12bn for which it has emerged as an L1 bidder.
Strong MNC parentage. ITDC is one of the few construction companies with an MNC parent with rich expertise in MRTS, airports, marine structures, micro-tunnelling and specialised projects. This helps it in gaining pre-qualification eligibility for large and complex EPC projects. Access to the technologies and know-how, skilled personnel and international design organisations through the parent company give ITDC an edge in superior project execution.
Balance sheet and profitability to improve. Most of its NHAI dues are now being settled (~Rs. 1.96bn received of Rs. 3bn). The proceeds and the QIP moneys have been utilised to repay debt and for working-capital required. The strong order inflows and completion of old low margin orders lead us to expect the consolidated EBITDA margin to improve to 9-10% in the next two years.
Valuation. At the CMP, the stock trades at a PE of 11.5x and P/BV of 2.3x CY17e. We initiate coverage with a Buy rating and a price target of Rs. 136, valuing the company at 15x CY17e EPS, in line with multiples of its peers.
Risks. A high degree of exposure to government projects, project-execution risks.
Shares of ITD CEMENTATION INDIA LTD. was last trading in BSE at Rs.105.6 as compared to the previous close of Rs. 106.15. The total number of shares traded during the day was 20410 in over 265 trades.
The stock hit an intraday high of Rs. 107.35 and intraday low of 104.75. The net turnover during the day was Rs. 2169100.
