External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

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Equity Bottom-Up

<ul><li>PSP Projects Ltd (PSPPL) Q2FY23 numbers were below our expectations due to the seasonally challenging quarter, which was impacted by the monsoon and many projects being in the initial stage of execution.</li><li>The company reported revenue of Rs 360 Cr (below expectation), down 8% YoY, EBIDTA of Rs 39 Cr (below expectation) down 28% YoY, and APAT of Rs 22 Cr (below expectation), down 41% YoY.</li><li>It registered EBITDA Margins of 11% in Q2FY23 (Our Estimate: 13.2%) as against14% in Q2FY22. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

PSP Projects Ltd (PSPPL) Q2FY23 numbers were below our expectations due to the seasonally challenging quarter, which was impacted by the monsoon and many projects being in the initial stage of execution.The company reported revenue of Rs 360 Cr (below expectation), down 8% YoY, EBIDTA of Rs 39 Cr (below expectation) down 28% YoY, and APAT of Rs 22 Cr (below expectation), down 41% YoY.It registered EBITDA Margins of 11% in Q2FY23 (Our Estimate: 13.2%) as against14% in Q2FY22. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PSP Projects Ltd - Seasonality Impacted the Performance

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<li>PSP reported profitable growth in FY22 with Revenue/EBITDA/APAT growing by 41%/90%//101% respectively.</li>
<li>The company reported the highest-ever revenue for the year since its existence.</li>
<li>Its EBITDA margins, too, improved to 14.8% in FY22 from 11% in FY21 led by the completion of major projects during the year.</li>
</ul>
<p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>


PSP reported profitable growth in FY22 with Revenue/EBITDA/APAT growing by 41%/90%//101% respectively.
The company reported the highest-ever revenue for the year since its existence.
Its EBITDA margins, too, improved to 14.8% in FY22 from 11% in FY21 led by the completion of major projects during the year.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PSP Projects Ltd - Creating Capabilities For Sustainable Growth!

Thematic (Sector/Industry)

<ul><li>For road construction companies under our coverage, we expect revenue growth of 10% YoY, EBITDA to be flattish, and APAT to de-grow by 2% YoY during the quarter.</li><li>Higher costs of a commodity such as steel, cement, aggregates, and diesel are expected to contract companies’ EBITDA margin by 150-200bps YoY.</li><li>In the Road Construction space, Q1and Q2 is normally a soft quarter in terms of project bidding and awarding and awarding activity normally accelerates in Q3 and Q4. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

For road construction companies under our coverage, we expect revenue growth of 10% YoY, EBITDA to be flattish, and APAT to de-grow by 2% YoY during the quarter.Higher costs of a commodity such as steel, cement, aggregates, and diesel are expected to contract companies’ EBITDA margin by 150-200bps YoY.In the Road Construction space, Q1and Q2 is normally a soft quarter in terms of project bidding and awarding and awarding activity normally accelerates in Q3 and Q4. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Infra-Road - Robust Order Book, Outlook Positive

<ul>
<li>Order Inflow: The company expects an order inflow of Rs 2,500 Cr in FY23, out of which Rs 1,050 Cr is received till date.</li>
<li>It has bid for projects with Nestle, Maruti, and MRF. The management has received an inquiry for a DLF project worth Rs 1,500 Cr in Delhi.</li>
<li>Total order book as of date stands at Rs 4,613 Cr giving revenue visibility for next two years.</li>
</ul>
<p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>


Order Inflow: The company expects an order inflow of Rs 2,500 Cr in FY23, out of which Rs 1,050 Cr is received till date.
It has bid for projects with Nestle, Maruti, and MRF. The management has received an inquiry for a DLF project worth Rs 1,500 Cr in Delhi.
Total order book as of date stands at Rs 4,613 Cr giving revenue visibility for next two years.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PSP Projects Ltd - Key Takeaways from The PSP Projects Management Meet

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<li>With favourable attributes such as strong and diversified order book position, healthy bidding pipeline and order inflows, asset-light model, emerging opportunities in the construction space, efficient and timely execution supported by high ROE and ROCE above 20% with the majority of Capex over, we expect the company to generate healthy free cash moving ahead and deliver Revenue/EBITDA/APAT growth of 27%/37%/40% CAGR over FY21-FY24E.</li>
<li>Currently, the stock is trading at 11x and 8x FY23E and FY24E EPS.</li>
<li>We value the company at 10.5x FY24E EPS to arrive at the target price of Rs 665/share, implying an upside potential of 26% from the current levels.</li>
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<p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>






With favourable attributes such as strong and diversified order book position, healthy bidding pipeline and order inflows, asset-light model, emerging opportunities in the construction space, efficient and timely execution supported by high ROE and ROCE above 20% with the majority of Capex over, we expect the company to generate healthy free cash moving ahead and deliver Revenue/EBITDA/APAT growth of 27%/37%/40% CAGR over FY21-FY24E.
Currently, the stock is trading at 11x and 8x FY23E and FY24E EPS.
We value the company at 10.5x FY24E EPS to arrive at the target price of Rs 665/share, implying an upside potential of 26% from the current levels.





Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PSP Projects: Key Takeaways from the PSP Management Meet on 8th June 2022

India

PSP Projects Limited operates as a construction company. The Company offers industrial, institutional, government, and residential projects construction, as well as allied services including planning, designing, and post-construction activities. PSP Projects serves the private and public sectors in India.

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PSP Projects (PSPPL IN)

PSP Projects Ltd - Seasonality Impacted the Performance

The company reported revenue of Rs 360 Cr (below expectation), down 8% YoY, EBIDTA of Rs 39 Cr (below expectation) down 28% YoY

Axis Direct

PSP Projects Ltd - Creating Capabilities For Sustainable Growth!

PSP reported profitable growth in FY22 with Revenue/EBITDA/APAT growing by 41%/90%//101% respectively. The company reported the highest-ever...

Axis Direct

Infra-Road - Robust Order Book, Outlook Positive

For road construction companies under our coverage, we expect revenue growth of 10% YoY, EBITDA to be flattish, and APAT to de-grow by 2% YoY...

Axis Direct

PSP Projects Ltd - Key Takeaways from The PSP Projects Management Meet

It has bid for projects with Nestle, Maruti, and MRF. The management has received an inquiry for a DLF project worth Rs 1,500 Cr in Delhi.

Axis Direct

PSP Projects: Key Takeaways from the PSP Management Meet on 8th June 2022

Order Book: The current order book stands at Rs 4,400 Cr. The top 2 big projects are Uttar Pradesh EPC projects for Medical School and EWS Housing...

Axis Direct

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