Hold Gayatri Projects; target of Rs 200: Sharekhan
Sharekhan’s research report on Gayatri Projects
In Q4FY19, GPL standalone revenue grew by 23% y-o-led by strong project execution, OPM dipped 246 bps y-o-y. Lower interest expenses boosted net earnings by 27% y-o-y. Order book stays strong at 4.7x its FY2019 standalone revenue; company expects order momentum to continue and has guided for a more than 25% revenue growth, a 30-40% rise in PAT and stable OPM for FY2020.
We maintain our Hold rating on the stock with a revised sum-of-the-parts (SOTP)-based PT of Rs. 200 as its EPC business, adjusting for its BoT and power investments, is valued at a P/E of 10.5x FY2021E, which provides limited upside potential.
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