Buy JMC Projects Ltd For Target Rs.114 - Yes Securities
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Result Highlights
* The company’s standalone revenue grew by 44% yoy and 27% qoq to Rs.13.5bn which is ahead of our estimates (Rs.11.3bn). The revenue for the year FY21 stood at Rs. 36.9bn and EBITDA at Rs. 3.3 bn
* EBITDA for the quarter came in at Rs. 1.4bn, up 27% yoy and 42% qoq. EBITDA margin stood at 10.0% for Q4 FY21 (11.3% in Q4 FY20). Control on employee expense and cost of construction has led to the qoq improvement in margins by 107bps
* Adjusted PAT came in at Rs. 601mn as against our estimate of Rs. 38mn during the quarter
* During the quarter, the company won new order worth around Rs. 11.9bn and the total order win for the year FY21 is around Rs. 79.2bn. The total order book as at 31st March 2021 stood at Rs. 140.0bn which is ~3.8x to TTM sales
* The company has declared dividend of Rs. 0.7/share
* Receivable days increased to 93 days vs 89 days in FY20 while payable days grew from 114 days to 130 days yoy.
* Total cash & equivalents has increased significantly to Rs. 2.1bn from Rs. 0.5bn.
Our view:
FY21 has ended on a strong note despite the COVID situation. We expect execution to pick up during FY22/23 with better labor availability and robust order book. We expect operating margin to improve gradually to 10‐11% levels as execution ramps up. The restructuring of BOT‐toll projects and higher toll collections would be additional positive. The stock currently trades at valuation of 8x FY22 P/E. We maintain our BUY rating on the stock for revised target of Rs.114 (based on SOTP valuation).
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