ValuePickr Forum

OM Metal Infraprojects is in Inflection point

Company name :OM METAL INFRAPROJECTS
Market Cap:Rs.729.50 Crores Current Price:Rs.75.75
Book Value:Rs.58.75 Promoter Holding:70.74%
Dividend Yield:0.26% Face value 1.00
Fundamental study:
*It’s an EPC company with distinctive knowledge in Hydro mechanical sector.It’s engaged in hydro mechanical and EPC contract for Hydro power & Irrigation project .Already executed 60 hydro mechanical contract successfully.
*It’s also diversified into various structural steel design and bridge fabrication large building construction ,heavy engineering and real estate work .
Current order book approx 900 crore

  • The Pallacia Project overcome the all legal hurdle and 75 % pallacia project work has been completed ,only pallacia project will generate profit approx 200 crore next 2 years .In pallacia ,company will realise from the sales proceed around 650000 sq ft, the minimum realization will be in the region of Rs 1200-12500/sq ft.
    So in lower end 650000 sq ft x Rs 12000 /sq ft=Rs 7800000000=780 crore
    & higher end 650000 sq ft x Rs 125000 /sq ft=Rs 8125000000=812.5 crore.Company has spent 200 crore to purchase of the land and approx 300 to 350 crore for development cost .So profit may be in the range of 200 to 250 core.But already completed 75 % of pallacia,so development cost for 75% already priced in ,so next 2 year cash flow will be more .
  • Apart from pallacia company has a land bank at Bandra bay.It has given devolopment right to DB reality and ADAG group The company has not spend any money for this project and it will realize from the sales proceeds around 250000 sq ft as and when the sales are made In Bandra the minimum realization will be in the region of Rs 25000-35000/sq ft which will generate cash flow of 625-875 crore over the next 5 years. In Bandra the minimum realization will be in the region of Rs 25000-35000/sq ft
    So in lower end 250000 sq ft x Rs 25000 /sq ft=Rs 6250000000=625 crore
    higher end 250000 sq ft x Rs 35000 /sq ft=Rs 8750000000=875 crore
    Apart from above company has lot of other project such as Silos,road BOT project ,hydro mechanical dam project etc

Technical Observations:
*The stock has crossed above 64 which was a 7 year resistance. We have seen big outperformance in stocks which have Crossed multi-year highs. The current breakout is an indication of a major change in trend for the stock.

*This period could be an excellent time to accumulate the stock.

*Recently a famous PMS service provider bought 14 lakhs share from open market also promoter bought from open market.
Disclosures:Holding my personal portfolio with approx 20 % of allocation
Risk : Slow execution of project might be impact profitability and also stock price
*views invited

Headline with a multibagger tag may seem tempting but could also mislead. The term ‘multibagger’ is overrated in my opinion. Secondly target projection needs to be based upon sound valuations not technicals.

1 Like

This is your first post on VP and also you have a badge of “Read Guidelines”. Please follow the guidelines and put up the risks in your thesis and also add your disclosures. I dont think you have read them properly - the community discourages giving price targets. Request you to revisit your post in line with the rules of the community.

4 Likes

thanks ,added disclosures ,deleted target price

Please mention risks - that is an important component of the thesis.

thanks ,added risk profile

Regarding target projection and valuation use common sense,and also see AR

Rather there are valuation models which can serve both of us better than common sense. Read about John Burr Williams and you would know why even Warren Buffett admires him so much.

Only Bandra project cash flow is greater than current market capital…I think you understand the logic

How did you arrive at this figure? Is it your estimate or coming from any secondary source?

Dear @Somitosh

Nolan is just trying to clarify your thesis. As you will come to understand once sufficient time is spent on VP. It is the anti thesis that makes better investors. I am also learning about the virtues of a bear case and trying to change my mindset.

Best
Bheeshma

Thanks for your query,
The company has a land bank at Bandra bay.It has given devolopment right to DB reality and ADAG group The company has not spend any money for this project and it will realize from the sales proceeds around 250000 sq ft as and when the sales are made(please see AR regarding land bank )
In Bandra the minimum realization will be in the region of Rs 25000-35000/sq ft
So in lower end 250000 sq ft x Rs 25000 /sq ft=Rs 6250000000=625 crore
higher end 250000 sq ft x Rs 35000 /sq ft=Rs 8750000000=875 crore
Annual Report :http://www.ommetals.com/files/Om%20Metal%20Annual%201-186%20Final%20Pages.pdf

3 Likes

September 2017 shareholding pattern :http://www.bseindia.com/corporates/shpSecurities.aspx?scripcd=531092&qtrid=95.00

Latest investor presentation:http://www.bseindia.com/xml-data/corpfiling/AttachHis/5f93a3ce-00dc-4eda-9d9b-f9fb1b168805.pdf

Updates:http://www.bseindia.com/xml-data/corpfiling/AttachHis/584225d2-9aad-47bc-8a37-0fac89d1be55.pdf

Corporate Announcement in the matter of Palacia Project:http://www.bseindia.com/xml-data/corpfiling/AttachHis/c305b356-8812-47f6-b469-107df04cc1a3.pdf

Om Metal sold non core low margin asset:http://www.bseindia.com/xml-data/corpfiling/AttachHis/f6b4e595-7aa9-492b-89a0-d060e17209c8.pdf

Corporate Announcement:http://www.bseindia.com/xml-data/corpfiling/AttachLive/aa897bce-e069-4273-bc14-0159aa7cf3e9.pdf

Red this

I see price correction in short term.

Kuch bhi…correcting to 50 soon.please base ur comments on facts not on fancies. The notice posted by you well come within the market hours and investors r well aware of the same. I m neither supporter nor investor in om metal. But a sincere advice restrain from posting sensational headlines on this forum… correct to 50 …