Author Topic: Bu J Kumar Infraprojects  (Read 10771 times)

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chetan

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Bu J Kumar Infraprojects
« on: March 17, 2010, 09:54:08 PM »
Kotak Securities has initiated Coverage on J Kumar Infraprojects with a BUY Rating and the following recommendation,

Quote
J Kumar Infraprojects is one of the leading players in the construction industry with nearly three decades of experience. Company's core expertise lies in transportation and piling related projects. It has also diversified into civil and irrigation segments. With its dominant position in Maharashtra region, we believe that company is well set to benefit from upcoming projects in urban infrastructure related to flyovers, skywalks, bridges etc as well as in irrigation segment. With a current order book of Rs.13 bn and enhanced net worth post recent fund raising, we expect company to benefit from large sized order inflows in various segments and maintain a high growth trajectory.

J Kumar Infraprojects also has excellent operating margins due to large  equipment bank and no subcontracting. This results in positive operational cash flows for the company. With strong order book and excellent margins, we expect company's revenues and net profits to grow at a CAGR of 65% between FY09-FY11. At current price of Rs 199, stock is trading at very attractive valuations of 8.3x and 6.2x P/E multiples on FY10 and FY11 respectively. We recommend a BUY on the stock with a price target of Rs.260 on FY11 estimates, providing an upside of 31% from the current levels.