Man Infraconstruction - Brokerage + Analyst Views

[sunil]

Man Infra is a Mumbai-based construction company that has undertaken projects in various states such as Maharashtra, Kerala, Gujarat, West Bengal, Goa and Tamil Nadu. It provides construction services for port infrastructure, residential, industrial, commercial and road infrastructure projects.

Issue opens : February 18, 2010
Issue closes : February 22, 2010
Price band : Rs243-252 per share
Offer size : 56.25 lakh shares

This is what Sharekhan had to say in its review,

Man Infra has witnessed impressive growth rate both in terms of revenue and net profit over the past few years. Further, its strong order book position of Rs2,021 crore provides strong visibility in revenue growth in the coming years. In terms of valuation, the stock is offered at around 13- 13.5x its FY2010 earnings (rough working) on post-issue diluted equity base. This is largely in line with the average valuations of its peer group companies.

Stay tuned for more from other analysts and brokerages.

[sunil]

PINC Research House Analyst Vinod Nair asks investors to subscribe to the IPO of Man Infraconstruction with the following recommendation,

On an annualised basis MIL’s EPS stands at Rs18 for 9MFY10 on which it will trade at 13.6x and 14x. Its extraordinary high margin certainly brings in a lot of cushion though skeptically high. We feel assured about MIL growth prospect led by its strong balance sheet and capex plan. New project win in BOT and Port will add to stability and quality of its order book. We recommend a ‘Subscribe’ to the issue as it has been priced reasonably in line to its peers in the industry, but its better operating parameters does leave some scope for higher valuation than peers.

[sunil]

IndiaBulls Research has the following view on this public issue,

According to our valuation, at a price band of Rs. 243-252, the Company proposes a P/E multiple of 12.2x-12.7x on our FY11 EPS estimates, which is at a discount of 11% and 8%, respectively compared to its peer (Gammon India, IVRCL Infra & Projects, Nagarjuna Construction, Simplex Infrastructures, B.L.Kashyap, and Ahluwalia Contracts). Besides, the Company’s FY11 EV/EBITDA multiple at 6.5x and 6.7x is at a significant discount of 25% and 22% to its peer at lower and higher price band, respectively. Furthermore, we have valued the Company using the DCF (WACC: 15.2% and Terminal Growth 5%) which offers an upside of 12% and 8% over the lower and higher end of the price band, respectively. Thus, we recommend investors to Subscribe to the issue.

[sunil]

SMC Analyst Mayank Garg has the following views with a 3-Star SMC Rating on the IPO,

Considering the P/E valuation, the company is trading at a P/E of 12.02x times on the lower side of the price band and 12.47x times on the higher side of the price band of its TTM earnings of Rs20.22. Looking at post issue valuation, the company is trading at a P/E of13.56x times on the lower side and 14.06x times on the higher side of its post issue TTM earnings of Rs17.92.

The company's strong order book position, higher operating margins & strong balance sheet provides sufficient revenue visibility to the company. Moreover, spread of the orderbook over a variety of segments gives it an added advantage. However, a high dependence on the real estate market with more than 80% of its order book comprising of orders from the real estate sector is something to look.

[komal]

HSBC Analysts Akhil Jain and Avinash Nahata have asked investors to SUBSCRIBE to the IPO with following note,

MICL’s annualised FY10 EPS on pre-issue capital is Rs 20.2 which translates into an annualized P/E of 12.5x FY10E at the higher band of the issue. Its peers trade at higher FY10 P/E valuations with Ahluwalia Contracts at 14.5x, IVRCL Infrastructure at 18.6x, Gammon India at 18.7x and Nagarjuna Construction at 20.1x (Source Bloomberg). Thus, we believe that the IPO at the higher price band of Rs 252 leaves room for listing gains.

On account of MICL’s strong business growth prospects and the valuations of the IPO price at the higher band of Rs 252 being reasonable, we recommend a Subscribe on Man Infraconstruction Limited’s IPO issue.

[chetan]

Angel Borking's Shailesh Kanani and Aniruddha Mate recommends clients to AVOID the IPO with the following note,

Man Infra's main client, DB Realty, has also been successful in raising funds to the tune of Rs1,500cr via an IPO, which augurs well for MInfra. We
have accordingly factored in MInfra's Order inflow in our model. On the Operating front however, as mentioned earlier, we have factored in sharp dip in
Margins. As a result, we estimate the company to report subdued Bottom-line CAGR of a mere 8% over FY2009-12E. On the valuation front, the IPO is available at a P/E of 11-12x FY2012E Earnings on the lower and upper price bands respectively, which is at a premium to listed players. Moreover, due to the concentrated nature of business and subdued Earnings growth, we believe the stock should trade at a discount to its peers. Hence, we recommend an Avoid to the Issue.