PINC Result Review – J. Kumar Infraprojects Ltd

J. Kumar Infraprojects (JKIL) reported a stellar set of numbers for FY10 & Q4FY10 as revenue grew by 88% and 79% resps, which beat our estimates of 75.5% and 55% growth resp. Adj margins for full year expanded 15.2%, a 30bps YoY improvement. For the quarter, however, margins were a tad below our estimate due to lower than expected skywalk mix. Adj PAT for the year surged by 68% to Rs554mn.

VALUATIONS AND RECOMMENDATION

At CMP of Rs201, the stock trades at FY11E P/E of 6.9x and FY12E P/E of 6.2. We maintain a P/E of 8.5x (40% discount to mid sized construction companies) on FY11E EPS of Rs28.9, thus to arrive at a target price of Rs246, an upside of 22%. We reiterate our 'BUY' recommendation on the stock. Opening order book for FY11 is up 20% against 180% CAGR in the last two years thus limiting sales execution in FY11. Quality of orders and new order wins in FY11 would be the triggers for the stock performance.

Source : Equity Bulls

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