simplex infrastructure (simcon) | 468static-news.moneycontrol.com/.../idirect...q4fy17.pdf · june...
TRANSCRIPT
June 5, 2017
ICICI Securities Ltd | Retail Equity Research
Result Update
Execution stays muted due to stretched Wcap
Simplex Infrastructure’s (SIL) topline de-grew 0.5% YoY to | 1550.1
crore and was below our estimate of | 1666.5 crore possibly on
account of stretched working capital causing muted execution
EBITDA margin expanded 79 bps YoY to 13.2% (our estimate: 11.0%)
despite muted execution on account of lower raw material expenses
(30.5% as percentage of sales in Q4FY17 vs. 34.5% in Q4FY16)
PAT zoomed 2.5x YoY to | 66.8 crore (our estimate: | 28.2 crore)
despite lower other income and topline de-growth, mainly on account
of EBITDA margin expansion and negative tax rate =
The board has recommended a dividend of | 0.5/share for FY17
Receives strong order inflows in FY17…
SIL has seen robust order inflows worth ~| 8117 crore in FY17, taking its
order book to ~| 16518 crore, 2.9x order book to bill ratio, providing
strong revenue visibility over the next few years. Additionally, the
company is L-1 bidder for orders worth | 558 crore. Furthermore, of these
order inflows, SIL received orders worth ~| 4200 crore in Q4FY17 largely
driven by power division. It includes a power project from Bhel worth
| 1475 crore and some road projects from North-East worth ~| 1000
crore. Overall, the management has guided for an order inflow guidance
of ~| 8000-9000 crore keeping in mind its strong bidding pipeline. Hence,
we have built in order inflows of | 8000 crore and | 8500 crore for FY18E
and FY19E, respectively. The management expects execution to improve
in FY18E and has guided for topline growth of ~10-15%. Consequently,
with improvement in order inflow and strong execution, we expect
topline to grow at 11.0% CAGR to | 6910.4 crore in FY17-19E.
Working capital remains stretched…
Currently, SIL’s gross debt (including current maturities) is at | 3325 crore
as on FY17 due to stretched working capital (WC) cycle. The management
continues to focus on WC improvement and has guided for recoveries to
the tune of ~| 1000 crore from old debtors over next two years.
Furthermore, SIL recovered | 210 crore from debtors. Hence, with these
recoveries coupled with claims from arbitration, the company is planning
to reduce its debt by ~| 300 crore by FY18E end. We believe that an
improvement in its working capital position & consequent debt reduction
will remain the key for SIL’s bottomline growth. We expect the bottomline
to grow at 26.5% CAGR to | 192.4 crore over FY17-19E.
Execution hinges on working capital improvement…
We like Simplex given its focused approach towards EPC business,
healthy order book and strong execution capabilities. In our view, SIL
would be a key beneficiary of the government’s focus on infrastructure
development coupled with cabinet’s move to boost liquidity in the sector.
However, debt remains at elevated levels. The company has failed to
reduce its debt and working capital still remains stretched which might
hinder its execution, going forward. Furthermore, the recent rally in the
stock (up 53% in last three months) leaves limited room for upside. We
have rolled over valuation to FY19E. We have a HOLD recommendation
on the stock with a target price of | 480/share. We value its EPC business
at | 460/share (at 6.5x FY19E EV/EBITDA), oil rigs business at | 7.4/ share
and BOT road projects at | 12.7/ share (at 0.7x P/BV).
Simplex Infrastructure (SIMCON) | 468
Rating matrix
Rating : Hold
Target : | 480
Target Period : 12-18 months
Potential Upside : 3% [
What’s changed?
Target Changed from | 365 to | 480
EPS FY18E Changed from | 31.3 to | 23.5
EPS FY19E Introduced at | 38.9
Rating Changed from Buy to Hold[
Quarterly performance
Q4FY17 Q4FY16 YoY (%) Q3FY17 QoQ (%)
Revenue 1,550.1 1,557.3 (0.5) 1,386.4 11.8
EBITDA 205.1 193.7 5.9 159.3 28.7
EBITDA (%) 13.2 12.4 79 bps 11.5 174 bps
PAT 66.8 26.3 153.7 18.4 263.0
Key financials
(| Crore) FY16 FY17 FY18E FY19E
Net Sales 5,811.6 5,607.5 6,129.6 6,910.4
EBITDA 631.5 688.7 703.8 807.2
Adj. Net Profit 66.3 120.3 116.5 192.4
EPS (|) 13.4 24.3 23.5 38.9 [
Valuation summary
(x) FY16 FY17E FY18E FY19E
P/E 34.9 19.2 19.9 12.0
Target P/E 35.9 19.8 20.4 12.3
EV / EBITDA 8.8 8.1 7.6 6.5
P/BV 1.5 1.5 1.4 1.3
RoNW (%) 4.3 7.9 7.1 10.4
RoCE (%) 10.6 11.8 12.0 13.8 [
Stock data
Particular Amount
Market Capitalization (| Crore) 2,314.1
Total Debt (| Crore) 3,372.0
Cash and Investments (| Crore) 25.0
EV (| Crore) 5,661.1
52 week H/L 475 / 260
Equity capital (| Crore) 9.9
Face value (|) 2.0 [
Price performance
Return % 1M 3M 6M 12M
NCC Ltd (11.0) 8.8 14.2 23.4
Simplex Infra 7.5 52.9 54.0 71.0
NBCC (0.3) 18.3 32.5 50.4 [
Research Analyst
Deepak Purswani, CFA
deepak,[email protected]
Vaibhav Shah
ICICI Securities Ltd | Retail Equity Research Page 2
Variance analysis
(| crore) Q4FY17 Q4FY17E Q4FY16 YoY (%) Q3FY17 QoQ(%) Comments
Revenues 1,550.1 1,666.5 1,557.3 -0.5 1,386.4 11.8 Topline de-growth was on account of stretched working capital
causing muted execution
Other Income 5.7 25.3 -8.9 -163.9 34.4 -83.6
Other expenditure 271.4 302.1 242.2 12.0 250.2 8.4
EBITDA 205.1 183.6 193.7 5.9 159.3 28.7
EBITDA Margin (%) 13.2 11.0 12.4 79 bps 11.5 174 bps EBITDA margin expanded 79 bps YoY to 13.2% (our expectation:
11.0%) despite muted execution on account of lower raw material
expenses (30.5% as a % of sales in Q4FY17 vs. 34.5% in Q4FY16)
Depreciation 48.6 49.0 51.4 -5.4 49.0 -0.8
Interest 112.9 116.5 109.1 3.5 116.5 -3.1
PBT 49.2 43.4 24.3 102.7 28.3 3,259.6
Taxes -17.6 15.2 -2.1 758.5 9.9 -278.1
PAT 66.8 28.2 26.3 153.7 18.4 263.0 PAT zoomed 2.5x YoY to | 66.8 crore (our estimate: | 28.2 crore)
despite lower other income and topline de-growth, mainly on account
of EBITDA margin expansion and negative tax rate
Source: Company, ICICIdirect.com Research
Change in estimates
FY19E
(| Crore) Old New % Change Introduced Comments
Revenue 5,607.5 6,551.0 6,129.6 -6.4 6,910.4 We have factored in execution slowdown
EBITDA 688.7 756.3 703.8 -6.9 807.2
EBITDA Margin (%) 12.3 11.5 11.5 -2 bps 0.0
Adj. PAT 120.3 154.9 116.5 -24.8 192.4 Significant bottomline decline as we have assumed muted execution as working
capital remains stretched
EPS (|) 24.3 31.3 23.5 -24.8 38.9
FY17 FY18E
Source: Company, ICICIdirect.com Research
Assumptions
Current Introduced Earlier
| crore FY14 FY15 FY16 FY17 FY18E FY19E FY18E Comments
Order inflow 5,263.3 6,388.2 5,062.0 8,117.0 8,000.0 8,500.0 7,500.0 We have factored in order inflows of | 8000 crore in FY18E
& | 8500 crore in FY19E in line with management guidance
Order Backlog 15,257.0 16,104.0 14,069.0 16,518.5 18,388.9 19,978.4 15,472.8
Execution - Average (%) 35.8 35.3 38.3 36.7 35.1 36.0 44.1
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 3
Company Analysis
Robust orderbook at | 16518 crore excluding L1 status of ~| 558 crore
The order book was at | 16518 crore implying a 2.9x orderbook to bill
ratio on a TTM basis. In terms of segments, buildings & housing
constituted mainly with ~27% share and power constituted ~25%. SIL
had an order inflow of ~ | 8117 crore in FY17, which bodes well for
execution, going ahead. The management has guided an order intake of
~| 8000-9000 crore in FY18E. Consequently, we have built in order inflow
of | 8000 crore and | 8500 crore in FY18E and FY19E, respectively. With
an improvement in execution on the back of anticipated recovery, the
order book would reach | 18389 crore and | 19978 crore in FY18E and
FY19E, respectively.
Exhibit 1: Quarterly order book
14,0
69
13,8
46
13,4
85
13,8
24
16,5
18
2.4 2.4 2.4
2.5
2.9
12000
14000
16000
18000
Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17
(|
crore)
2.0
2.3
2.5
2.8
3.0
(x)
Orderbook Orderbook to bill ratio (RHS)
Source: Company, ICICIdirect.com, Research
Exhibit 2: Order book (Annual)
16,1
04
14,0
69
16,5
18
18,3
89
19,9
78
12000
15000
18000
21000
FY15 FY16 FY17 FY18E FY19E
(|
crore)
Source: Company, ICICIdirect.com, Research
Exhibit 3: : Quarterly Order book break-up (Segment wise)
4 4 4 4 4 5 5 4
12 14 1419
1417 16
254 2 20
21 1
1
6 6 6
11
56 6
5
22 22 22
19
1414
12
18
12 12 12
11
15
16 21
20
40 40 4038
4643 39
27
0
20
40
60
80
100
Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17
(%
)
Piling & Grd eng Power Marine Industrial Roads, Railways & Bridges Urban Utilities Bldg & Housing
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 4
Exhibit 4: Geography wise orderbook break-up
92%
8%
Domestic Overseas
Source: Company, ICICIdirect.com, Research
Exhibit 5: Clientele wise orderbook break-up
62.0%
38.0%
Government Private
Source: Company, ICICIdirect.com, Research
BOT update…
Currently, SIL has a BOT road portfolio of only one project post amicable
termination of Mahulia Kharagpur and Jowai Meghalaya project. SIL’s
Chandikol project is complete. The company is awaiting CoD. It is already
collecting toll of | 25 lakh per day. Post PCOD, a 40% hike in tariff is
expected.
For projects, viz. Mahulia Kharagpur & Jowai Meghalaya, SIL had not yet
received land and other clearances. Consequently, the company has
served a notice for amicable termination of the projects. The management
has also indicated it will now focus on EPC, which is its forte. We also
derive comfort from this stand of SIL, as it ensures no equity commitment
going forward, given the already stretched balance sheet.
Exhibit 6: BOT project details
SIL's
stake (%)
Project Cost
(| crore)
Debt
(| crore)
Equity
(| crore)
Grant/ (Prem.) |
crore
SIL's Equity
(| crore)
Invested till date (|
crore) Remarks
Bhubaneshwar - Chandikol 35 1,411 1,058 149 204 52 65 Construction is completed, CoD
certificate is expected in one month
Mahulia Kharagpur 51 1,159 867 163 126 80 5 Company has served notice for
amicable termination
Jowai Meghalaya 100 326 136 65 125 65 3 Company has served notice for
amicable termination
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 5
Revenues to grow at 11.0% CAGR during FY17-19E…
In FY12-16, revenue has remained flattish on account of stagnant order
inflows, stretched balance sheet and delay in execution. However, with a
pick-up in order inflows and anticipated improvement in working capital
cycle, we expect revenues to grow at a CAGR of 11.0% during FY17-19E.
Exhibit 7: Revenue trend
6129.6 6910.45581.6 5811.6 5607.5
4000
5000
6000
7000
8000
FY15 FY16 FY17 FY18E FY19E
(|
crore)
11.0% CAGR
Source: Company, ICICIdirect.com Research
Exhibit 8: FY17 revenue break-up
12%
10%
4%
13%
11%13%
37%
Piling & Grd eng
Power
Marine
Industrial
Roads, Railways & Bridges
Urban Utilities
Bldg & Housing
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 6
Margins sustainable at 11.7% by FY19E…
Historically, the EBITDA margin has remained in the range of 9-9.5%. This
was mainly due to muted growth in order inflow and delay in execution
primarily owing to slow payment cycle and client side delays. However,
SIL has posted a healthy EBITDA margin of 12.3% in FY17 due to
operational efficiencies. Going ahead, we expect EBITDA margins to be
sustainable at 11.7% levels in FY19E.
Exhibit 9: EBITDA and EBITDA margin trend
628.5
631.5
688.7
703.8
807.2
11.3
10.9
12.3
11.5
11.7
300
450
600
750
900
FY15 FY16 FY17 FY18E FY19E
(|
crore)
9
10
11
12
13
14
(%
)
EBITDA EBITDA Margin (RHS)
Source: Company, ICICIdirect.com Research
Working capital remains a concern…
Currently, the debt to equity of SIL is at 2.1x level. Going ahead, SIL’s
insistence on focusing on EPC only gives us comfort in terms of no
further equity commitment for BOT. While we do anticipate an
improvement in working capital cycle mainly due to Simplex’s effort
through collection drive and some arbitration, the pick-up in execution is
likely to offset the improvement. Hence, we expect net debt to equity to
be at 1.6x and working capital (WC) (ex-cash) days to be at ~201 days in
FY19E.
Exhibit 10: Working capital days and net debt/equity trend
233
228
232
211
201
2.2
2.12.1
1.81.6
0
50
100
150
200
250
300
FY15 FY16 FY17 FY18E FY19E
(days)
0.0
0.6
1.2
1.8
2.4
3.0
(x
)
Working Capital days Net Debt / Equity (RHS)
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 7
Earnings to grow at 26.5% CAGR during FY17-19E…
In FY12-17, PAT grew moderately at 4.7% CAGR. However, with the
improvement in WC days and debt reduction, going ahead, we expect
earnings to grow robustly at 26.5% CAGR to | 192.4 crore in FY17-19E on
the back of topline growth (mainly due to its focus on the EPC business,
well-built diversified order book and strong execution capabilities) and
similar level of interest expense.
Exhibit 11: PAT and PAT margin trend
62.4
66.3
120.3
116.5
192.4
1.11.1
2.1
1.9
2.8
0
75
150
225
300
FY15 FY16 FY17 FY18E FY19E
(|
crore)
0.0
1.0
2.0
3.0
4.0
(%
)
PAT PAT Margins (RHS)
[
Source: Company, ICICIdirect.com Research
Return ratios to improve from hereon…
In the past, Simplex has enjoyed return ratios in the range of 13-17%.
However, it slipped in the last couple of years mainly due to a stretched
balance sheet leading to PAT de-growth. However, going forward, we
expect RoCE and RoNW to improve to 13.8% and 10.4%, respectively, in
FY19 on the back of stable margins and robust bottomline growth.
Exhibit 12: Return ratios trend
4.3 4.3
7.9
7.1
10.49.8
10.6
11.8 12.0
13.8
3.0
6.0
9.0
12.0
15.0
18.0
FY15 FY16 FY17 FY18E FY19E
(%
)
RoNW RoCE
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 8
Valuation
We like Simplex given its focused approach towards the EPC business,
healthy order book and strong execution capabilities. In our view, SIL
would be a key beneficiary of government’s focus on infrastructure
development coupled with cabinet’s move to boost liquidity in the sector.
However, SIL’s debt remains at elevated levels. The company has failed
to reduce its debt and working capital still remains stretched which might
hinder its execution, going forward. Furthermore, the recent rally in the
stock (up 53% in the last three months) leaves limited room for upside.
We have rolled over valuation to FY19E. We have a HOLD
recommendation on the stock with a target price of | 480/share. We value
its EPC business at | 460/share (at 6.5x FY19E EV/EBITDA), oil rigs
business at | 7.4/ share and BOT road projects at
| 12.7/ share (at 0.7x P/BV).
Exhibit 13: SOTP valuation
Businesses Value (| crore) Per share (|) Comment
Construction business 5,246.9 1,056.5 6.5x FY19 EV/EBITDA
Oil rig business 36.6 7.4 DCF based valuation
BOT road project valuation 63.0 12.7 at 0.7x P/BV
Less: Net debt -2,964.7 -596.9 FY19E Net Debt
Fair value 2,381.9 479.6
Rounded off target price 480.0
Source: Company, ICICIdirect.com Research
Exhibit 14: EV/EBITDA trend
0
1,500
3,000
4,500
6,000
7,500
9,000
May-06
May-07
May-08
May-09
May-10
May-11
May-12
May-13
May-14
May-15
May-16
May-17
EV
(|
s C
r)
EV 10x 8x 6x 4x
Source: Company, ICICIdirect.com Research
Exhibit 15: Valuations metrics
Sales
(| cr)
Sales
Growth (%)
EPS
(|)
EPS
Growth (%)
P/E
(x)
P/BV
(x)
RoNW
(%)
RoCE
(%)
FY16 5773.4 4.2 13.4 6.2 34.9 1.5 4.3 10.6
FY17E 5607.5 -2.9 24.3 81.5 19.2 1.5 7.9 11.8
FY18E 6129.6 9.3 23.5 -3.2 19.9 1.4 7.1 12.0
FY19E 6910.4 12.7 38.9 65.2 12.0 1.3 10.4 13.8[
Source: Company, ICICIdirect.com Research
We have valued SIL based on our SOTP based price target
of | 480/share
ICICI Securities Ltd | Retail Equity Research Page 9
Recommendation History vs. Consensus Chart
0
120
240
360
480
600
Jun-17Mar-17Jan-17Oct-16Aug-16Jun-16Mar-16Jan-16Oct-15Aug-15May-15
(|
)
0.0
20.0
40.0
60.0
80.0
100.0
(%
)
Price Idirect target Consensus Target Mean % Consensus with BUY
Source: Bloomberg, Company, ICICIdirect.com Research
Key events
Date Event
May-12 Acquires Joy Mining Services to expand its footprint into underground mining
Sep-12 Divests its stake in Joy Mining Services
Sep-13 Recovery in stock price as inflows remain buoyant
Apr-14 Recovery in stock price on the back of formation of stable government at the centre and it's 10 year agenda to focus on infrastructure
Jun-14 Surge in the stock price post Finance Ministry's two-pronged plan to boost infrastructure investment
Jul-15 The government plans to award road construction projects worth | 1.26 lakh crore during FY16. It is targeting to award a total of 273 projects covering a total length
of 12,900 kms which would offer humungous opportunities for Simplex Infrastructure
Nov-15 Simplex Infrastructure plans to buy balance 49% stake in Maa Durga Expressways (MDEPL), which is involved in the four-laning of the stretch spanning Mahulia to
Baharagora to Kharagpur on NH-6 in Jharkhand and West Bengal.
Dec-15 The government has set up a | 40,000 crore National Investment and Infrastructure fund (NIIF), which is meant to fund development of infrastructure projects,
including reviving stalled ones, positive for the company
Apr-16 The Mumbai Metropolitan Region Development Authority (MMRDA) has awarded contracts to design and construct the 16.5 km Metro-VII corridor in 3 packages from
Andheri East to Dahisar East to Simplex Infrastructure, NCC and J Kumar Infra.Simplex will design and construct the first package
Source: Company, ICICIdirect.com Research
Top 10 Shareholders Shareholding Pattern
Rank Name Latest Filing Date % O/S Position (m) Change (m)
1 Anupriya Consultants Pvt. Ltd. 31-Dec-16 14.3% 7.1 0.0
2 RBS Credit & Financial Developments Pvt. Ltd. 31-Dec-16 9.6% 4.8 0.0
3 HDFC Asset Management Co., Ltd. 31-Dec-16 9.0% 4.4 0.0
4 Reliance Nippon Life Asset Management Limited 31-Dec-16 8.8% 4.3 0.0
5 Mundhra (Bithal Das) 27-Mar-17 6.2% 3.0 (0.0)
6 Baba Basuki Distributors Pvt. Ltd. 27-Mar-17 5.0% 2.5 0.5
7 Mundhra (Yamuna) 31-Dec-16 4.6% 2.3 0.0
8 Mundhra (Amitabh Das) 31-Dec-16 4.1% 2.0 0.0
9 Mundhra (Rajiv) 31-Dec-16 3.8% 1.9 0.0
10 East End Trading & Engineering Consultants Services Pvt. Ltd. 31-Dec-16 2.5% 1.3 0.0[
(in %) Sep-16 Dec-16 Mar-17
Promoter 56.01 56.01 56.2
Public 43.99 43.99 43.80
Others 0.00 0.00 0.00
Total 100.00 100.00 100.00
Source: Reuters, ICICIdirect.com Research
Recent Activity
Investor name Value (m) Shares (m) Investor name Value (m) Shares (m)
Baba Basuki Distributors Pvt. Ltd. 2.2 0.5 Mundhra (Bithal Das) (0.1) (0.0)
Simplex Infraproperties Pvt. Ltd. 0.6 0.1 State Bank of India (0.1) (0.0)
Reliance Nippon Life Asset Management Limited 0.2 0.0 Goldman Sachs Asset Management (India) Private Ltd. (0.0) (0.0)
Excel Funds Management Inc. 0.0 0.0
Buys Sells
Source: Reuters, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 10
.
Financial summary
Profit and loss statement | Crore
(| Crore) FY16 FY17 FY18E FY19E
Net Sales 5,811.6 5,607.5 6,129.6 6,910.4
Growth (%) 4.1 -3.5 9.3 12.7
Raw Material Cost 1,936.9 1,642.2 1,844.2 2,065.3
Employee Cost 2,206.7 2,248.3 2,457.7 2,770.8
Other Expenditure 1,036.6 1,028.3 1,124.0 1,267.2
Total Operating Expenditure 5,180.1 4,918.8 5,425.9 6,103.2
EBITDA 631.5 688.7 703.8 807.2
Growth (%) 0.5 9.1 2.2 14.7
Other income 97.0 89.1 93.5 98.2
Depreciation 202.8 197.8 205.8 213.8
EBIT 428.7 490.9 498.0 593.4
Interest 429.3 445.4 417.6 404.4
PBT 96.4 134.6 173.9 287.2
Tax 30.1 14.3 57.4 94.8
Rep. PAT 66.3 120.3 116.5 192.4
Exceptional items 0.0 0.0 0.0 0.0
Adj. Net Profit 66.3 120.3 116.5 192.4
Growth (%) 6.2 81.5 -3.2 65.2
EPS (|) 13.4 24.3 23.5 38.9
Source: Company, ICICIdirect.com Research
Cash flow statement | Crore
(| Crore) FY16 FY17E FY18E FY19E
| crore
Profit after Tax 66.3 120.3 116.5 192.4
Depreciation 202.8 197.8 205.8 213.8
Interest paid -429.3 -445.4 -417.6 -404.4
Cash Flow before wc changes 631.5 688.7 703.8 807.2
Net Increase in Current Liabilities 100.9 418.5 225.1 474.4
(Increase)/Decrease in Inventories 104.3 101.7 -69.5 -103.9
(Increased/Decrease in Debtors 183.2 452.8 -142.4 -213.0
Net cash flow from op. activities 79.9 241.0 242.2 45.2
(Purchase)/Sale of Fixed Assets -249.2 -214.9 -100.0 -100.0
(Purchase)/Sale of Investments -4.9 14.5 0.0 0.0
Other income -97.0 -89.1 -93.5 -98.2
Net cash flow from inv. activities -157.1 -111.3 -6.5 -1.8
Proceeds from Long Term Borrowings 509.7 17.8 -117.8 -100.0
Proceeds from Short Term Borrowings -471.1 0.0 0.0 0.0
Dividend and Dividend Tax Paid -3.0 -6.0 -5.8 -9.5
Net cash flow from fin. activities 69.0 -110.9 -113.7 -99.6
Net Cash flow -8.3 18.7 122.1 -56.2
Cash and Cash Equivalent in beginning 22.7 14.4 33.2 155.2
Cash and cash equivalents at end 14.4 33.2 155.2 99.1
Source: Company, ICICIdirect.com Research
Balance sheet | Crore
(| Crore) FY16 FY17 FY18E FY19E
Liabilities
Equity capital 9.9 9.9 9.9 9.9
Reserves & Surplus 1,528.9 1,520.4 1,641.0 1,833.8
Shareholder's fund 1,538.8 1,530.3 1,650.9 1,843.7
Secured & unsecured debt 3,263.7 3,281.6 3,163.7 3,063.7
Deferred Tax Liablity 164.6 106.4 106.4 106.4
Sources of funds 4,967 4,918 4,921 5,014
Assets
Gross Block 2,244.5 2,458.5 2,558.5 2,658.5
less: Acc. Depreciation 1,087.8 1,285.5 1,491.3 1,705.1
Net Block 1,156.8 1,173.0 1,067.2 953.4
Capital WIP 10.5 11.5 11.5 11.5
Net Fixed Assets 1,167.3 1,184.5 1,078.7 964.8
Investment 152.5 137.9 137.9 137.9
Inventories 848.1 746.4 815.9 919.9
Trade Receivables 1,982.2 1,529.4 1,671.8 1,884.8
Cash 14.2 32.9 155.2 99.1
Loans & Advances 895.0 476.4 943.9 1,064.2
Other current assets 2,988.7 4,310.1 3,842.2 4,142.3
Total current assets 6,880.7 7,233.2 7,567.0 8,248.1
Current Liab. & Prov. 3,080.8 3,499.4 3,724.4 4,198.8
Net Current Asset 3,799.9 3,733.8 3,842.6 4,049.3
Application of funds 4,967 4,918 4,921 5,014
Source: Company, ICICIdirect.com Research
Key ratios
FY16 FY17E FY18E FY19E
Per share data (|)
Reported EPS 13.4 24.3 23.5 38.9
Cash EPS 54.4 64.2 65.1 82.1
BV per share 310.9 309.2 333.5 372.5
Revenue per share 1,166.3 1,132.8 1,238.3 1,396.0
Cash Per Share 2.9 6.7 31.4 20.0
Operating Ratios (%)
EBITDA Margin 10.9 12.3 11.5 11.7
PBT / Net Sales 1.7 2.4 2.8 4.2
PAT Margin 1.1 2.1 1.9 2.8
Inventory days 53 49 49 49
Debtor days 124 100 100 100
Creditor days 111 111 105 105
Return Ratios (%)
RoE 4.3 7.9 7.1 10.4
RoCE 10.6 11.8 12.0 13.8
RoIC 8.7 10.1 10.5 12.1
Valuation Ratios (x)
P/E 34.9 19.2 19.9 12.0
EV / EBITDA 8.8 8.1 7.6 6.5
EV / Net Sales 1.0 1.0 0.9 0.8
Price to Book Value 1.5 1.5 1.4 1.3
Solvency Ratios (x)
Debt/EBITDA 5.2 4.8 4.5 3.8
Net Debt / Equity 2.1 2.1 1.8 1.6
Current Ratio 2.2 2.0 2.0 1.9
Quick Ratio 1.9 1.8 1.7 1.7
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 11
ICICIdirect.com coverage universe (Construction)
CMP M Cap
(|) TP(|) Rating (| Cr) FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E
NBCC (NBCC) 197 195 Hold 17,694 3.4 3.9 4.6 57.0 50.1 42.2 47.0 40.0 33.5 11.8 10.5 9.3 20.7 21.0 22.0
PNC Infratech (PNCINF) 146 155 Buy 3,647 9.5 8.2 6.8 14.8 17.1 20.5 13.2 15.3 12.9 2.6 2.3 2.1 11.3 9.8 10.2
Sadbhav Engg. (SADENG) 313 350 Buy 5,371 6.6 7.8 11.0 47.5 40.4 28.7 21.5 20.2 18.9 4.0 3.7 3.3 8.4 9.1 11.5
Ashoka Buildcon (ASHBUI) 194 190 Buy 3,610 3.7 5.3 6.0 52.3 36.7 32.2 10.2 10.0 9.4 1.6 1.6 1.5 3.1 4.3 4.6
Simplex Infra (SIMCON) 459 480 Hold 2,274 21.4 17.3 17.6 21.9 26.9 26.5 8.2 8.7 9.4 1.5 1.4 1.4 7.1 5.4 5.3
NCC (NAGCON) 88 110 Buy 4,898 4.3 4.1 4.7 19.7 21.0 18.1 8.7 9.0 8.4 1.4 1.4 1.3 7.0 6.6 6.9
Sector / Company
RoE (%)EPS (|) P/E (x) EV/EBITDA (x) P/B (x)
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 12
RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey Head – Research [email protected]
ICICIdirect.com Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
ICICI Securities Ltd | Retail Equity Research Page 13
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