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Research
Maintain Buy on MBL Infrastructures - Angel Broking
Posted On : 2016-04-04 23:17:40( TIMEZONE : IST )
MBL Infrastructures (MBL) reported having won 2 NHAI road projects worth Rs. 2,126cr on Hybrid Annuity model.
The first project entails 4-laning of Chutmultpur-Ganeshpur section of NH-72A to Roorkee-Chutmalpur-Gagalheri section of NH-73, covering a stretch of 53.3kms. MBL won this project at a bid price of Rs. 942cr, against the NHAI base price of Rs. 809.88cr. This Hybrid Annuity project is a 15-year project, which includes 730 days of construction period.
The second project covers 4-laning of Gagalheri-Saharanpur-Yamunanagar section of NH-73, covering a 51.455kms stretch. MBL won this project at a bid price of Rs. 1,184cr, against NHAI base price of Rs. 1,009.36cr. This Hybrid Annuity project is a 15-year project, which includes 730 days of construction period.
For both the projects, Sadbhav Engineering was the second lowest bidder.
MBL's unexecuted order book as of 3QFY2016 stood at ~Rs. 4,748cr (order book [OB] to LTM revenues at ~2.0x). With these 2 project wins, we now expect MBL to end FY2016 with OB to LTM sales ratio of ~2.8x, indicating better revenue visibility.
Outlook and valuation: MBL's stock price has corrected by ~50% in the last 12 months period owing to order book concerns. For FY2016, MBL has surpassed its order inflow guidance of Rs. 2,500cr. Considering the strong roads & highways bid pipeline and MBL's strong market positioning, we are optimistic that MBL has a fair chance of attaining its order inflow guidance of Rs. 2,800cr for FY2017E. Post the recent order wins, concern over its order book get allayed up to certain extent. Also 3 of its BOT projects are expected to commence operations in FY2016-17E, which should lead to initiation of debt repayment cycle at SPV level. All these positives shaping-up comfort us that the stock is poised to get re-rated. Using SoTP based valuation methodology we arrive at FY2017E based price target of Rs. 285. Given the upside potential, we maintain our Buy on the stock.
Shares of MBL Infrastructures Ltd was last trading in BSE at Rs.157.7 as compared to the previous close of Rs. 153.9. The total number of shares traded during the day was 210091 in over 2130 trades.
The stock hit an intraday high of Rs. 168 and intraday low of 155.1. The net turnover during the day was Rs. 33584329.
