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Capacit'e Infra-projects IPO Note
September 13, 2017 | PM Securities
IPO Highlights
Our Take
We believe that Capacit’e Infraprojects Ltd. is a fairly new infra company serving well established developers & currently witnessing the high growth phase. With an impressive top-line,EBIDTA & PAT 3 year CAGR of 75.43%, 121.19% & 156.92% respectively, fairly healthy balance sheet with a Longterm Debt to equity ratio of 0.22x & an order book of Rs. 4,049.07 Crs. the company seems to be operationally an out-performer in the peer group however at 24.3x FY17 earnings its priced at a minimal premium in comparison to the peers at par namely Ahluwalia Contracts (India),JMC Projects, Simplex Infrastructures trading at 22.57x , 20.73x & 17.75x FY17 earnings respectively, however the high growth phase and strong financials justify the petty valuation premium. We assign a subscribe rating to this IPO, moderate listing gains can be expected.
Business Overview
Capacit'e Infraprojects Ltd. was incorporated in August 2012. The company extends construction services for High Rise and Super High Rise Buildings, Gated Communities, Villaments, Commercial and Office Complexes, Institutional Buildings, and Multi Level Car Parks for very reputed developers in the infra space like Lodha, Godrej, Wadhwa, Hiranandani, Oberoi Realty etc. to name a few.
Chairman & Independent director Mr. Deepak Mitra formerly has served on the Board Of Directors of Petron Engineering Construction Limited for over 26 years & has 56 years of experience in the industry & Mr. Rahul Katyal, MD of the company has 23 years of experience & served formerly on the Board Of Directors of Capacit’e Structures limited (Formerly known as Pratibha Pipes & Structural Ltd.)
The company predominantly operates in the Mumbai metropolitan region (MMR), the National Capital Region (NCR) and Bengaluru. Its operations are geographically divided into MMR and Pune (West Zone), NCR and Patna (North Zone) and Bengaluru, Chennai, Hyderabad, Kochi and Vijaywada (South Zone). As on 31st May 2017, projects in the West Zone, North Zone and South Zone constituted approximately 58.93%, 14.29% and 26.79% of its total projects, respectively.
The company’s top-line,EBIDTA & PAT has been growing at impressive 3 year CAGR of 75.43%, 121.19% & 156.92% Respectively. However 2014 had a low base with PAT at just Rs. 4.11 Crs.
Objects of the Issue:
Funding working capital requirements (Rs. 250 crore)
Funding purchase of capital assets (system formwork) (Rs. 52 crore)
General corporate purposes
Key Financials:
Valuation*
No. of shares post issue: 6,78,91,497 crores
Net earnings FY17: 69.7 crores
EPS (post issue): 10.27
P/E: 24.34x FY17 earnings
*Valuation is done att upper end of price band ie, at Rs.250
Disclaimer
This document has been prepared and compiled from reliable sources. While utmost care has been taken to ensure that the facts stated are accurate and opinions given are fair and reasonable, neither the Company nor any of its Directors, Officers or Employees shall in any way be responsible for the contents. The Company, its Directors, Officers or Employees may have a position or may otherwise be interested in the investment referred in this document. This is not an offer or solicitation to buy, sell or dispose off any securities mentioned in this document.
Copyright © 2017 Pankaj Mangaldas Securities pvt. ltd. , All rights reserved.
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