The company’s execution is gradually recovering towards normalcy, analysts at HDFC Securities said. Capacite Infraproject’s management has given guidance of Rs 2,000 crore in revenue in FY22 on the back of a strong order book and ramp-up in ongoing projects. This is despite the headwinds that the pandemic brought for the real estate linked companies. The company has also moved towards reducing debt to Rs 260 crore by the first quarter of the next fiscal year against Rs 370 crore in the previous quarter. “Whilst Capacite Infraprojects missed our revenue/EBIDTA estimates by 12/11%, EBITDA margin outperformance led to in-line APAT,” said HDFC Securities in a note.
Client list strong, order book resilient
Capacite Infraprojects has a healthy mix of clients with the residential order book comprising marquee names such as Oberoi, Godrej, Brigade, CIDCO, BSNL, K Raheja, and Brookfield. Along with that, the company has ramped up government share in the order backlog to 60% against near zero over the past two years. “Now with real estate recovery, market share gains for organised players and pick-up in government ordering, CIL stands to gain,” HDFC Securities said.
Order book at the end of December 2020 was at Rs 9,150 crore, translating into an order-book-to-sales ratio of 6x FY20 revenues, according to brokerage firm Prabhudas Lilladher. This excludes Rs 4,360 crore worth of orders from MHADA. The brokerage firm believes that Capacite Infraprojects is well-positioned to gain traction driven by an impressive execution track record with stable margins; healthy order book lean balance sheet with healthy return ratios; and asset-light business model.
Analysts advise ‘Buy’
HDFC Securities has a ‘Buy’ rating on the stock with a target of Rs 320 per share. The brokerage firm said that Capacite Infraprojects is well-placed for a re-rating. Analysts at Prabhudas Lilladher have reduced their FY21 EPS estimates from Rs 2.3 to Rs 0.2 while keeping FY22/23 estimates largely unchanged. They expect the stock price to shoot up to Rs 270 per share. Yes Securities is also bullish on the stock with a target price of Rs 250 apiece.
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