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OTHER HIGHLIGHTS:

* For Q3FY22, within the Consultancy Segment, revenue from Domestic Consultancy was Rs. 300.51 cr and revenue from Overseas Consultancy was Rs. 60.73 cr where margins stood at 24%.

* The turnover mix between Turnkey and consultancy business segment was roughly 53% consultancy and 47% turnkey each during the quarter under observation.

* The company secured orders worth Rs. 1,506.2 cr in 9MFY22 out of which, Consultancy (Domestic): Rs. 1,477.5 cr, Consultancy (Overseas): Rs. 28.7 cr and Turnkey: NIL.

* Total Cumulative order book as on Dec 2021: Rs. 8,212.1 cr. Consultancy: 61% and Turnkey: 39%.

OUTLOOK AND VALUATION

We have altered our estimates looking at the slow business operations, new projects undertaken, marginal increase in business secured in 9MFY22 and the stagnant order book position of the company. The urea business of the company is additionally hampering the PAT margins of the company on a consolidated basis which is detrimental for the minority shareholders. Hence, our revenue expectations for FY24E to Rs. 3,476 cr with an EBITDA of Rs. 389 cr PAT of Rs. 425 cr and EPS of Rs. 7.56. We have assigned an EV/EBITDA multiple of ~11.5X and have arrived at a target price of ~Rs. 103 within an investment horizon of 18 to 24 months. The target price gives an upside of ~50% with a BUY rating from the current price of Rs. 69.

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