MBL Infrastructures – Emerging star – Q3FY12 Update/Target price change – Buy, TP INR249, Upside: 48% – Elara
February 20, 2012
Yet another strong quarter, results ahead of estimates
MBL witnessed yet another strong quarter with revenues rising by 26.8% YoY to INR3.4bn, led by significant work completion on the ongoing road projects and commencement of works on the newly bagged jobs. Though OPMs declined marginally by 58bps YoY to 14.5% (majorly owing to initial mobilization expenses on recent jobs), operating profits rose by 21.9% YoY to INR487mn. Net profits for the period stood at INR222mn, ahead of our estimates.
Backlog to bill ratio improves to 1.4x FY13E revenues
MBL’s current backlog at INR22.2bn has improved significantly QoQ, increasing revenue predictability. The company bagged fresh orders worth INR14.4bn since Q3FY12 including its fifth road BOT project worth INR5.1bn from PWD, Rajasthan. Won on a concession period of 16 years, the project is for developing the Bikaner Suratgarh section of NH-15 on a DBFOT basis. Among the other major jobs awarded include construction of three housing projects amounting to INR1.3bn in Bhopal, Madhya Pradesh.
Considering probable easing up in the bidding environment going forward, we raise our fresh order inflow target to INR30bn for FY13 (Vs INR25bn earlier). MBL presently has un-awarded cumulative bids in excess of INR120bn, clarity on which should emerge in subsequent quarters. Our revised valuation model builds in revenues worth INR12.5bn and INR16.4bn for FY12 and FY13 respectively.
Maintain ‘Buy’, revise Mar’13 based TP upwards to INR249
Considering a stellar show on both order inflows and operational fronts, we revise our FY12-14 estimates upwards factoring a strong revenue (27.8% CAGR) and profitability growth (~21% CAGR). We maintain our stance that MBL’s operations would continue to witness a major leg up as the order awarding gathers further momentum. Maintain ‘Buy’ in light of a proven integrated business model, state of the art equipment bank geared up to deliver growth and a professionally qualified team led by a competent management team
December 19, 2011
CRISIL Research has come out with its report onMBL Infra . The research firm has maintained the valuation grade 5/5 to the company in its December 12, 2011 report.
MBL Infrastructure Ltd’s (MBL’s) Q2FY12 revenues and earnings were above CRISIL Research’s expectations. Given the timely execution of projects, revenues registered robust growth of 25.3% y-o-y. Although high raw material cost pulled down EBITDA margin by 156 bps y-o-y to 15.2%, it was above our expectation of 13.7%. PAT registered muted growth of 1.8% as lower EBITDA margin and increased interest and depreciation costs offset revenue growth. Order inflows remained subdued during the quarter – MBL’s current order book is valued at ~Rs 12.5 bn (1.1x TTM revenue), which provides visibility only for the next 12 months. We maintain our earnings estimate and fundamental grade of 3/5.
Q2FY12 result analysis:
- Revenues grew by 25.3% y-o-y to Rs 1,540 mn due to the timely execution of projects. H1FY12 revenues grew by 34.1% to Rs 4,671 mn.
- EBITDA margin declined by 156 bps y-o-y to 15.2% due to increased raw material cost. H1FY12 EBITDA margin declined by 98 bps y-o-y.
- PAT increased 1.8% y-o-y to Rs 80 mn due to lower EBITDA margin and higher interest and depreciation costs. However, it was better than our expectations. H1FY12 PAT increased by 20.2% y-o-y to Rs 283 mn.
- Order intake during the quarter was subdued. The company received orders worth Rs 1 bn from Haryana PWD and National Building Construction Corporation and ~Rs 2 bn from Madhya Pradesh Road Development Corporation. The current order book is valued at ~Rs 12.5 bn (1.1x TTM revenue), which provides visibility for just 12 months.
- Recently, it received road projects worth Rs 415 mn in Madhya Pradesh on BOT basis (toll + annuity). With this, the company now has four road BOT projects in its portfolio, of which one is operational and three are under construction.
- Construction work on the Orissa road project is on schedule; till date, the company has completed work worth Rs 40 crore.
Valuations: Current market price has strong upside We continue to value MBL based on the sum-of-the-parts method. The contracting business has been valued on the P/E method (with a P/E multiple of 6x), while BOT projects have been valued on the DCF method. We maintain our fair value estimate of Rs 249 per share. At the current market price, the stock merits a valuation grade of 5/5.
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August 23, 2011
Construction firm MBL Infrastructures today said it has bagged a road development project worth an estimated Rs 212 crore from Madhya Pradesh Development Corporation.
The road project, to be executed through a wholly-owned subsidiary, is in the Seoni and Balaghat districts of Madhya Pradesh and passes through the towns of Seoni, Ari, Tighra, Kehaji, Paraswada and Kantangi.
“MBL Infrastructures Ltd has been awarded the project for developing the Seoni-Katangi to Maharashtra Border Section of State Highway-54 of Madhya Pradesh on a BOT (toll) basis by Madhya Pradesh Road Development Corporation,” the company said in a filing to the Bombay Stock Exchange.
While the concession period for the project is 30 years, the stipulated construction period is 730 days, it said.