Gayatri projects CMP (158) - Mkt cap 2954 crores
One of the oldest players in Infra- core areas of expertise- roads, irrigation, industrials
have won early completion bonuses across few projects
FY18 revenues - 2912 crs- Growth of 38%
FY18 Profit - 188 Cr- against guidance of 150 crs- Growth of more than ore than 150% driven by margin expansion- management had guided for 15% EBITDA margins and achieved 16.1% for the year.
FY18 Net debt/ equity - 1.52x
FY18 working capital cycle - 49 Days - This is very good
FY18 ROE-16.7%
Promoter Background: TV Sandeep Kumar reddy- Promoter and MD did his masters in Construction Engineering from University of Michigan and bachelors in Civil Engineering from Purdue University . Founder promoters- Sandeeps Father- has linkages with Congress but he is retired now.
FY19 Management guidance
Current orderbook is 13,200 Crs- significant chunk is NHAi orders- FY19 new order intake is already 6000 crs
Revenue growth of 30%- INR 3800 crs
profit growth of 50% - implied PAT guidance INR 285 crs
EBITDA margins will exceed 16%
ROEs will exceed 25%
- owns ~4% in sembcorp India which is going public at 14000 -16000 crs ( estimated valuations)- could be worth 400-500 crs optional value .
Gayatri projects also went through a ratings upgrade recently .
Stock is available at 10.4x FY19E PE and 15.7x TTM PE Multiple …
** Key question is rerating : if one were to consider range of FY19 PE multiple of 16x FY19 PAT.excluding the optional value from sembcorp the stock can touch 250.**
Sector Comments: not affected significantly from Crude, Rupee - Dollar… Strong tailwinds across the road sector on order inflows…
Appreciate inputs from others