simplex infrastructure (simcon) | 468static-news.moneycontrol.com/.../idirect...q4fy17.pdf · june...

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

[email protected]

mailto:[email protected]


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


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



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)


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



Exhibit 4: Geography wise orderbook break-up

92%

8%

Domestic Overseas


Exhibit 5: Clientele wise orderbook break-up

62.0%

38.0%

Government Private


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



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


(|

crore)

11.0% CAGR


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



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


(|

crore)

9

10

11

12

13

14

(%

)

EBITDA EBITDA Margin (RHS)


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


(days)

0.0

0.6

1.2

1.8

2.4

3.0

(x

)

Working Capital days Net Debt / Equity (RHS)



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


(|

crore)

0.0

1.0

2.0

3.0

4.0

(%

)

PAT PAT Margins (RHS)

[


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


(%

)

RoNW RoCE



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


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


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[


We have valued SIL based on our SOTP based price target

of | 480/share


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


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


.

Financial summary

Profit and loss statement | Crore


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


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


Balance sheet | Crore


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


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



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)



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

[email protected]


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