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MBL Infrastructures Ltd Research Report - 05th Apr 2016

Infrastructure | Published on Apr 04th 2016

IT

MBL Infrastructures (MBL) reported having won 2 NHAI road projects worth Rs2,126cr 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 Rs942cr, against the NHAI base price of Rs809.88cr. 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 Rs1,184cr, against NHAI base price of Rs1,009.36cr. 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 ~Rs4,748cr (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 `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 Rs2,800cr 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 Rs285. Given the upside potential, we maintain our Buy on the stock.

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CMP 154
Target Price 285
Investment Period12 Months

Stock Info

MCAP BSE (Rs in Cr)316.92
MCAP NSE (Rs in Cr)314.43
P/E (x)3.47
EPS (Rs.)22.00
BV (Rs.)174.76
Div Yield (%)1.96
FV (Rs.)10.00
P/BV (x)0.43
EV/Sales (x)0.73
EV/EBITDA (x)6.48

Shareholding Pattern (%)

Public & Others44.0
Promoter37.0
Institution10.0
Foreign9.0
Corporate0.0
Grand Total100.0

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