J Kumar Infraprojects Ltd - Rs 85.00
Established in 1980, J Kumar Infraprojects Ltd (JKIL) is a civil engineering and infrastructure development company whose primary focus is on development of roads, flyovers, bridges, railway over bridges, irrigation projects, commercial and residential buildings, railway buildings, sports complexes and airport contracts. For smooth functioning, it has broadly divided its project work into four segments namely transport engineering, civil construction, irrigation projects & pilling work. Among these segments JKIL has developed strong expertise in transport engineering space like undertaking design & construction of roads & flyovers on a turnkey basis, widening of highways etc. It is also among the few construction companies implementing innovative construction techniques such as RCC box jacking, volumetric & panelized construction, insulating concrete framework (ICF), flexible concrete pavement technology etc. However JKIL’s operations are largely confined in the state of Maharashtra and that too especially Mumbai. Notably, it is a class IA contractor with PWD, Government of Maharashtra and has been a preferred government contractor over the past years.
Over the years, the company has earned many accolades for timely & quality execution of its projects. Few of its well known projects include Konkan Bhavan Flyover at Navi Mumbai, Ghatkopar Cheddanagar flyover, Aurangabad flyover, Goregaon sports complex, Residential quarters of AAI staff, Bandra Terminus Bldg etc apart from various projects for road widening, irrigation and pilling. Interestingly, JKIL prefers to execute the whole project independently and also ensures to bag the contract directly from the govt agencies and developers. With substantial order coming from govt dept its main and renowned clientele includes MSRDC, MMRDA, PWD, MCGM, Mumbai Rail Vikas Corporation, Indiabulls Real Estate, SMC Infrastructures & Sarthak Developers. Nevertheless, JKIL has also formed strategic alliances with other private contractors like Era Construction, Indiabulls, Nagarjuna etc. with whom it has entered into project specific JVs & subcontracting relationships for specific purposes. Importantly, to complete the project effectively and on time, company owns a large fleet of modern construction equipments like hydraulic piling rigs, putmiester, mobile boom placer concrete pump and stationery concrete pumps, transit mixers, various capacity cranes, poclains, front end loaders, JCBs and tippers. It also has a ready mix concrete plant for captive use as well as to supply to third parties. Of late company has been putting more thrust to expand the lucrative business of pilling and RMC.
As of now, JKIL boasts of having a huge order in hand position of more than Rs 700 cr to be executed in coming 24 months or so. This is 3.5x times its FY08 turnover, thereby ensuring strong revenue visibility for coming years. Importantly, execution across multiple segments has not only enabled JKIL in de-risking its business model, but has also provided a platform to leverage on opportunities emerging from these segments. With massive investment expected to happen in infrastructure segment and govt making higher budgetary allocation, the future of JKIL looks quite promising. It reported 90% jump in revenue to Rs 214 cr and 140% increase in PAT to Rs 19.50 thereby posting an EPS of Rs 9 for FY08. Even for Q1FY09, company has reported encouraging performance and is expected to end FY09 with topline of Rs 400 cr and NP of Rs 28 cr. This translates into EPS of Rs 14 on current equity of Rs 20.70 cr. Thus, at CMP scrip is trading fairly cheap at a PE ratio of merely 6x times against its FY09 earnings. Secondly the scrip is available at 20% discount to its IPO price of Rs 110. Investors are advised to buy at sharp declines with a price target of Rs 120 within a year.
No comments:
Post a Comment