Supreme Infrastructure: Infra player with a strong foundation

August 17, 2011

Mid-sized infrastructure EPC contractor Supreme Infrastructure appears substantially undervalued considering its better than industry performance in terms of margins, return on equity and working capital cycle. Its growing order book and entry into BOT road projects give strong visibility about future growth. Long-term investors should add this scrip to their portfolio.

GROWTH DRIVERS

The company currently has orders worth Rs 3,117 crore which is 3.4 times its sales for FY11. Nearly 85% of these unexecuted orders are for buildings and roads, while the rest consist of bridges, irrigation and power etc.

In the roads segment, Supreme Infra is a fully backward integrated company. It produces all the key raw materials such as asphalt and RMC, and has in-house stone quarrying and crushing capacities. This enables it to earn one of the best margins in the industry.

Source: economictimes.indiatimes.com