DILIP BUILDCON - The best road contractor - A 25% grower in a messy industry.
I’ll put down whatever info I have collected about this business.
Best road contractor available in the country.
Current market cap - RS. 7700 CR
Current market price - 560 rs/share
Price / boomk = 5
P/E = 17 [ Reasonable valuation ]
OPM = 18 - 20%
ROCE = 18%
ROE = 18%
DEBT / EQUITY = 2.5 [ Slightly on the higher side ]
Total sales close to 6000 crore at 7-7.5% net margin [ net profit close to 450 cr] .
Bullish viewpoints :
Growing at 30 - 35 % CAGR PER Annum
Best in execution in the industry. [ 90% projects completed ahead ofschedule]
Largest road contractor in the country.
Very good order book. [19000 CRORE]
Industry is turning around From an Avg road contruction rate of 10 km per day [ 2008] to 20 km per day in 2016 .Govt wants the no. to reach 35 km per day.
The Company has grown from a single state contractor [MADHYA PRADESH] to a pan india contractor.
Dilip is perfectly in control of the show : less than 5% of the job is subcontracted. Most of the peers like ashoka, pnc buildcon etc subcontract 30 - 50% of the project.
Order book to revenue ratio at 3 which is an amazing no to have. Close to 20,000 crore of orderbook.
Dilip has 0% stuck projects which is epic ! Industry avg is 22-24% . Companies like pnc, knr etc has as high as 40% stuck projects !!
10 . Capex cycle almost done - close to 2000 cr. capex done in the last 5 yrs.
Working cap cycle is improving from 400 days to 100 days [ as DILIP switches from pvt. projects to govt projects].
Topline and bottom line has grown at 30-35% % YoY for the last 3 financial year . and at least15% during the bad years [ 2011 - 2014]
Management and company background :
DILIP management is so far stain free to my knowledge.
90% REVENUE IS FROM ONE SINGLE CUSTOMER - goi [Govt of india].
Heavy interest burden
Govt reducing infra spending.
Experts closely monitoring the company or industry pls contribute more info.
Looks to be an interesting business. A 25% grower in a messy industry.
PS : Share price grew 3x during the last 1yr.
Disclosure :- Invested.