Result Update

February 16, 2016

Simplex Infrastructure (SIMCON)

Rating matrix
Rating
Target
Target Period
Potential Upside

:
:
:
:

Buy
| 350
12-18 months
48%

WC improvement key to growth...

Whats changed?
Target
EPS FY16E
EPS FY17E
Rating

Changed from | 450 to | 350

Changed from | 15.6 to | 14.7
Changed from | 31.2 to | 20.0
Unchanged

Quarterly performance
Revenue
EBITDA
EBITDA (%)
PAT

Q3FY16
1,391.5
148.6
10.7
19.0

Q3FY15
1,435.7
166.5
11.6
14.8

YoY (%)
(3.1)
(10.8)
-92 bps
28.9

Q2FY16
1,396.5
164.2
11.8
13.6

QoQ (%)
(0.4)
(9.5)
-108 bps
40.3

Key financials
(| Crore)
Net Sales
EBITDA
Adj. Net Profit
EPS (|)

FY14
5,513.0
589.8
60.6
12.2

FY15
5,581.6
628.5
62.4
12.6

FY16E
5,766.1
663.1
73.2
14.7

FY17E
6,474.3
731.6
99.2
20.0

FY14
19.3
29.0
6.8
0.8
4.5
9.3

FY15
18.8
28.1
7.0
0.8
4.4
9.4

FY16E
16.0
24.0
6.5
0.8
4.9
9.8

FY17E
11.8
17.7
5.8
0.7
6.3
10.9
[

Stock data
Particular
Market Capitalization (| Crore)
Total Debt (| Crore)
Cash and Investments (| Crore)
EV (| Crore)
52 week H/L
Equity capital (| Crore)
Face value (|)

Price performance
1M

3M

6M

12M

NCC Ltd

(18.8)

(23.2)

(18.8)

(29.2)

Simplex Infra

(22.4)

(27.6)

(30.0)

(41.1)

NBCC

(16.2)

(7.8)

(20.8)

14.4
[

Research Analyst
Deepak Purswani, CFA
deepak,purswani@icicisecurities.com
Vaibhav Shah
vaibhav.shah@icicisecurities.com

ICICI Securities Ltd | Retail Equity Research

With order inflow of ~| 3272 crore in 9MFY16, SILs order book till
Q3FY16 was strong at | 14,855 crore, 2.5x orderbook to bill ratio on a
TTM basis, providing strong revenue visibility going forward.
Furthermore, it is also L-1 bidder for the projects aggregating ~| 3,153
crore which bodes well for execution, going ahead. L1 bids majorly
comprise of a thermal power project from Bhel worth ~| 1600 crore, a
hydro power project from NHPC worth ~| 1200 crore, Dedicated Freight
Corridor (DFC) project worth | 300 crore and remainder from a sewerage
project. The management had given a order inflow guidance of | 70008000 crore in FY16E and meeting the guidance would solely depend on
conversion of these L1 orders. Going forward, with improvement in order
inflow and execution along with moderate improvement in working
capital cycle, we anticipate SILs topline will grow at 7.7% CAGR to
| 6474.3 crore in FY15-17E.
WC improves marginally

Amount
1,171.7
3,207.0
43.0
4,335.7
508 / 230
9.9
2.0

Return %

Simplex Infrastructures (SIL) topline de-grew 3.1% YoY to | 1391.5

crore and was marginally below our estimate of | 1488.1 crore
The EBITDA margin contracted 92 bps YoY to 10.7% and was below
our expectation of 11.5% mainly due to bad debt provision worth | 24
crore. Adjusting for that, EBITDA margin stood at 12.4%
PAT grew 28.9% YoY to | 19.0 crore in line with our estimate of | 19.0
crore despite a weak operating performance mainly due to lower
effective tax rate (24.0% in Q3FY16 vs. 37.2% in Q3FY15) and higher
other income. The other income came in higher at | 35.4 crore in
Q3FY16 vs. | 5.3 crore in Q3FY15 mainly due to written back of
provision worth | 26 crore

Strong order inflows boost orderbook

Valuation summary
(x)
P/E
Target P/E
EV / EBITDA
P/BV
RoNW (%)
RoCE (%)

| 236

With the managements focus on working capital (WC) improvement, SIL

has recovered ~| 350 crore from old debtors in 9MFY16 mainly
comprising ~| 144 crore from a construction project in Qatar and | 80
crore from a Tata power project. This has helped the company to reduce
its debt by | 144 crore sequentially to | 3207 crore (though it remained
same at FY15 level). Going ahead, the management expects to recover
~| 500 crore and | 750 crore in FY16E and FY17E, respectively from old
debtors through which it could reduce its debt. Furthermore, the
management feels that it would take more four to six quarters for the WC
cycle to improve. We highlight that the improvement in WC & consequent
debt reduction would be the key for its topline and bottomline growth.
Going ahead, we expect SIL to witness 26.1% CAGR in bottomline at
| 99.2 crore in FY15-17E.
Quality play in EPC space on recovery; maintain BUY
We like Simplex on account of its focus on the EPC business (no equity
commitment towards BOT portfolio), its strong well diversified order book
and relatively better quality of management and execution capabilities.
We also highlight that SIL will be a key beneficiary of the anticipated
recovery in the investment cycle. We have a BUY recommendation on the
stock with a target price of | 350/share. We have valued its EPC business
at | 328.7/share (at 6.5x FY17E EV/EBITDA largely in line with historical
average of 6.7x during FY04-15).

Variance analysis
(| crore)
Net Sales

Q3FY16
1,391.5

Q3FY16E
1,488.1

Q3FY15
1,435.7

YoY (%)
-3.1

Q2FY16
1,396.5

QoQ(%)
-0.4

Other Income
RM cost
Staff cost
Other expenditure

35.4
431.6
541.7
269.6

13.4
507.1
561.1
249.5

5.3
497.1
492.3
279.8

572.1
-13.2
10.0
-3.6

14.1
471.7
526.5
234.1

151.4
-8.5
2.9
15.2

EBITDA
EBITDA Margin (%)

148.6
10.7

170.5
11.5

166.5
11.6

-10.8
-92 bps

164.2
11.8

-9.5
-108 bps

Depreciation
Interest

50.1
108.9

52.8
102.4

51.6
96.7

-2.8
12.5

51.0
106.0

-1.7
2.7

25.0
6.0
19.0

28.7
9.7
19.0

23.5
8.8
14.8

6.4
-31.4
28.9

21.3
7.8
13.6

-1,051.4
-22.6
40.3

PBT
Taxes
PAT

Comments
Topline de-grew 3.1% YoY to | 1391.5 crore marginally below our
estimate of | 1488.1 crore

EBITDA margin contracted 92 bps YoY to 10.7% and was marginally

below our expectation of 11.5%

PAT grew 28.9% YoY to | 19.02 crore inline with our estimate of | 19.0
crore despite weak operating performance mainly due to higher other
income (| 35.4 crore in Q3FY16 vs. | 5.3 crore in Q3FY15) and lower
effective tax rate (24% in Q3FY16 v/s 37.2% in Q3FY15)

Source: Company, ICICIdirect.com Research

Change in estimates
(| Crore)
Revenue
EBITDA
EBITDA Margin (%)
Adj. PAT
EPS (|)

Old
5,950.3
684.3
11.5
77.3
15.6

FY16E
New % Change
5,766.1
-3.1
663.1
-3.1
11.5
0 bps
73.2
-5.3
14.7
-5.5

Old
7,047.0
796.3
11.3
154.7
31.2

FY17E
New % Change
6,474.3
-8.1
731.6
-8.1
11.3
0 bps
99.2
-35.8
20.0
-35.9

Comments

We have lowered our assumption to reflect 9MFY16 performance and

management focus to improve working capital management resulting into
subdued execution

Source: Company, ICICIdirect.com Research

Assumptions
| crore
FY13
FY14
Order inflow
6,306.0
5,263.3
Order Backlog
15,493.0
15,257.0
Execution - Average (%)
37.8
35.8
Source: Company, ICICIdirect.com Research

FY15E
6,388.2
16,104.0
35.3

ICICI Securities Ltd | Retail Equity Research

Current
FY16E
FY17E
7,550.0
7,450.0
17,846.2
18,821.8
34.2
35.3

Earlier
FY16E
FY17E
7,600.0
8,000.0
17,779.4
18,732.5
35.0
38.6

Comments
We have now incorporated 9MFY16 performance

Page 2

Company Analysis
Robust orderbook at | 14,855 crore excluding L1 status of ~| 3153 crore
The order book stood at | 14,855 crore implying a 2.5x orderbook to bill
ratio on a TTM basis. In terms of segments, buildings & housing
constituted majorly with ~42% share of which high rise towers
constituted ~29% while institutional buildings constituted ~13%. SIL had
an order inflow of ~ | 4472 crore in YTDFY16 (~| 6400 crore in FY15),
which bodes well for execution, going ahead. The management has
guided an order intake of ~| 7000-8000 crore in FY16E. However,
considering current working capital scenario we have built in order inflow
of | 7550 crore and | 7450 crore in FY16E and FY17E, respectively. And
with improvement in execution on the back of anticipated recovery, order
book would reach to | 17,846 crore and | 18,822 crore in FY16E and
FY17E, respectively.
Exhibit 1: Quarterly order book
3.3

Q4FY15

Q1FY16

Q2FY16

Q3FY16

Orderbook

12000
10000

2.0

18,822

14,855

Q3FY15

2.3

14000
17,846

14,888

9000

15,139

11000

16,104

2.5

16000

16,104

2.5

2.5

13000

18000

2.8

(| crore)

2.6

16,810

(| crore)

20000

3.0

15,257

2.9

15000

22000

15,493

3.1

(x)

17000

Exhibit 2: Order book (Annual)

FY13

FY14

FY15

FY16E

FY17E

Orderbook to bill ratio (RHS)

Source: Company, ICICIdirect.com, Research

Source: Company, ICICIdirect.com, Research

Exhibit 3: Geography wise order book break-up

18%

82%

Domestic

Overseas

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 3

BOT update
Currently, SIL has a BOT road portfolio of only one project post amicable
termination of Mahulia Kharagpur and Jowai Meghalaya project. The
Bhubaneswar Chandikol is complete (invested equity of | 74 crore) with
currently tolling of | 25 lakh/day. The company indicated it has applied for
completion of a bridge, post which the toll would rise to | 35 lakh/day.
For projects, namely, Mahulia Kharagpur & Jowai Meghalaya, SIL had not
yet received land and other clearances. Consequently, the company has
served a notice for amicable termination of the projects. The management
has also indicated it will now focus on EPC, which is its forte. We also
derive comfort from this stand of SIL, as it ensures no equity commitment
going forward, given the already stretched balance sheet.
Apart from that, the company has also invested | 24 crore of equity in the
Solapur transmission project.
Exhibit 4: BOT project details
SIL's
stake (%)

Project Cost
(| crore)

Debt
(| crore)

Equity Grant/ (Prem.) | SIL's Equity Invested till date (|

(| crore)
crore
(| crore)
crore)

Bhubaneshwar - Chandikol

35

1,411

1,058

149

204

52

65

Construction is completed, CoD

certificate is expected in one month

Mahulia Kharagpur

51

1,159

867

163

126

80

Jowai Meghalaya

100

326

136

65

125

65

Company has served notice for

amicable termination
Company has served notice for
amicable termination

Remarks

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 4

Revenues to grow at 7.7% CAGR during FY15-17E

In FY09-15, revenue has grown at a CAGR of 3.0%. The sluggishness in
growth can be broken down into two phases. During FY09-12, the
sluggish growth in revenue can be attributed mainly to stagnant order
inflow. During FY13-15, de-growth in revenue was mainly due to a
stretched balance sheet and delay in execution. Going ahead, we expect
revenues to grow at a CAGR of 7.7% during FY15-17E mainly due to an
improvement in macroeconomic scenario and moderate improvement in
working capital cycle. This is expected to lead to a pick-up in execution,
going ahead.
Exhibit 5: Revenue trend
10000
9000
8000
(| crore)

7000
6000

5820.8

5513.0

5581.6

5766.1

FY13

FY14

FY15

FY16E

6474.3

5000
4000
3000
2000
1000
0
FY17E

Source: Company, ICICIdirect.com Research

Exhibit 6: 9MFY16 revenue break-up

8%
10%
Piling & Grd eng

33%
5%

Power
Marine
Industrial
Roads, Railways & Bridges

13%

Urban Utilities
Bldg & Housing

16%

15%

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 5

Margins to remain stable at 11.3% till FY17E

Historically, the EBITDA margin has remained in the range of 9-9.5%. This
was mainly due to muted growth in order inflow and delay in execution
primarily owing to slow payment cycle and client side delays. However,
SIL has posted a healthy EBITDA margin of 10.7% and 11.3% in FY14 and
FY15, respectively. Going ahead, we expect EBITDA margins to remain at
similar levels in FY16E and FY17E on the back of robust order inflow and
moderate improvement in working capital cycle.
Exhibit 7: EBITDA and EBITDA margin trend
900

13

750
11.5

12
11.3
11

663.1

731.6

628.5

150

10

9.2
589.8

300

(%)

450

538.1

(| crore)

11.3

10.7

600

FY13

FY14

FY15

FY16E

FY17E

EBITDA

9
8

EBITDA Margin (RHS)

Source: Company, ICICIdirect.com Research

Working capital remains a concern but improvement visible

Currently, the debt to equity of SIL is at 2.2x level. Going ahead, SILs
insistence on focusing on EPC only gives us comfort in terms of no
further equity commitment for BOT. We highlight that we have not built
up any reduction in the debt as an improvement in payment cycle will
hold key for its targeted debt collection. While we do anticipate an
improvement in working capital cycle mainly due to Simplexs effort
through collection drive and some arbitration, the pick-up in execution is
likely to offset the improvement. Hence, we expect net debt to equity to
be at 1.9x and working capital (WC) (ex-cash) days to be at ~214 days in
FY17E.
Exhibit 8: Working capital days and net debt/equity trend
300

3.0

250

2.1

1.9

2.0

2.4
1.8

150

(x)

(days)

200

2.2
2.0

1.2

100
206

233

229

214

0.6
171

50

FY13

FY14

FY15

FY16E

FY17E

Working Capital (ex cash) days

0.0

Net Debt / Equity (RHS)

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 6

Earnings to grow at 26.1% CAGR during FY15-17E

In FY09-15, PAT de-grew at 10.4% CAGR. This was primarily due to an
increase in the debt level mainly required to finance its stretched working
capital. However, with the improvement in WC days and debt remaining
at same level, going ahead, we expect earnings to grow at 26.1% CAGR
to | 99.2 crore in FY15-17E on the back of topline growth (mainly due to
its focus on the EPC business, well-built diversified order book and strong
execution capabilities) and similar level of interest expense.

120

2.6
2.3
2.0
1.7
1.4
1.1
0.8
0.5
0.2
-0.1

100
1.5

1.3
1.1

1.1

1.0

60

73.2

99.2

62.4

20

60.6

40
59.8

(| crore)

80

FY13

FY14

FY15

FY16E

FY17E

PAT

(%)

Exhibit 9: PAT and PAT margin trend

PAT Margins (RHS)

Source: Company, ICICIdirect.com Research

Return ratios to improve from here on

In the past, Simplex has enjoyed return ratios in the range of 13-17%.
However, it slipped in the last couple of years mainly due to a stretched
balance sheet and delay in execution leading to PAT de-growth. However,
we expect RoCE and RoNW to be at 12.0% and 9.7%, respectively, in
FY17E on the back of growth in topline and bottomline.
Exhibit 10: Return ratios trend
10.9

12.0
10.0

9.3

9.3

9.8

9.4

8.0
6.0

6.3
4.8

4.5

4.4

FY13

FY14

FY15

4.9

4.0
2.0
0.0

RoNW

FY16E

FY17E

RoCE

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 7

Conference call highlights

ICICI Securities Ltd | Retail Equity Research

SILs order book as of December, 2015 stands at | 14855 crore

excluding the L1 of | 3153 crore. The new order inflow in Q3FY16 was
| 1333 crore and for YTDFY16 was at | 4472 crore. L1 bids majorly
comprises of a thermal power project from Bhel worth ~| 1600 crore,
a hydro power project from NHPC worth ~| 1200 crore, a railway
project from Dedicated Freight Corridor (DFC) worth | 300 crore and
remainder from a sewerage project

In 9MFY16, SIL received ~| 350 crore from its old debtors mainly
comprising of ~| 144 crore from a construction project in Qatar and
| 80 crore from a Tata power project. SIL is expecting to recover
~| 500 crore from old outstanding dues in FY16E and ~| 750 crore in
FY17E. Further, SILs gross debt has reduced by | 144 crore to | 3207
crore in Q3FY16. Its working capital position has also improved with
its net working capital at | 3562 crore (a QoQ reduction of | 132 crore)

SILs credit rating for short term loans is A1 while for long term loans
is A

SILs average cost of borrowing 9MFY16 stands at 10.88%

Page 8

Valuation
We like Simplex on account of its focus on the EPC business (no equity
commitment towards BOT portfolio), its strong well diversified order book
and relatively better quality of management and execution capabilities.
We also highlight that SIL will be a key beneficiary of the anticipated
recovery in the investment cycle. We have a BUY recommendation on the
stock with a target price of | 350/share. We have valued its EPC business
at | 328.7/share (at 6.5x FY17E EV/EBITDA largely in line with historical
average of 6.7x during FY04-15).
Exhibit 11: SOTP valuation

We have valued SIL based on our SOTP based price target

Businesses
Construction business

of | 350/share

(| crore)
4,755.4

Per share (|)

954.5

Comment
6.5x FY17 EV/EBITDA

Oil rig business

36.6

7.4

DCF based valuation

BOT road project valuation

90.0

18.1

at 1x P/BV

Less: Net debt

Fair value
Rounded off target price

-3,107.9
1,774.1

-625.8
353.6
350.0

FY17E Net Debt

Source: Company, ICICIdirect.com Research

Exhibit 12: Average EV/EBITDA Trend

Exhibit 13: EV/EBITDA Trend

7,500

15.0

6,000
4,500

EV/EBITDA

Average(6.7x)

+1 STD

-1 STD

EV

10x

8x

6x

4x

Source: Company, ICICIdirect.com, Research

Source: Company, ICICIdirect.com, Research

Exhibit 14: Valuations metrics

FY14
FY15
FY16E
FY17E

Sales
(| cr)
5513.0
5581.6
5766.1
6474.3

Sales Gr
(%)
-5.3
1.2
3.3
12.3

EPS
(|)
12.2
12.6
14.7
20.0

EPS Gr
(%)
8.1
3.1
17.2
35.6

P/E
(x)
19.3
18.8
16.0
11.8

P/BV
(x)
0.8
0.8
0.8
0.7

RoNW
(%)
4.5
4.4
4.9
6.3

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Apr-16

Apr-15

Apr-14

Apr-13

Apr-12

Apr-11

Apr-10

Apr-09

Apr-08

Apr-05

Apr-16

Apr-15

Apr-14

Apr-13

Apr-12

Apr-11

Apr-10

Apr-09

Apr-08

0
Apr-07

3.0
Apr-06

1,500
Apr-05

6.0

Apr-07

3,000

Apr-06

EV (|s Cr)

9.0

Apr-04

(x)

12.0

Page 9

RoCE
(%)
9.3
9.4
9.8
10.9

Company snapshot
700
600
500
Target Price 350

400
300
200
100

Apr-17

Jan-17

Oct-16

Jul-16

Apr-16

Jan-16

Oct-15

Jul-15

Apr-15

Jan-15

Oct-14

Jul-14

Apr-14

Jan-14

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Source: Bloomberg, Company, ICICIdirect.com Research

Key events
Date
Jan-08
FY09
FY10
Jul-10
FY12 & FY13
May-12
Sep-12
Sep-13
Apr-14
Jun-14
Jul-15

Event
Sharp fall in stock prices led by sluggishness in order inflows and global crisis
Slowdown in international order book continued to haunt the stock price performance
The stock saw a run up of 5x as equity markets recovered leading to re-rating of the stocks
Libya crisis puts pressure on the stock as the company has a presence there
The working capital further deteriorated resulting in net debt to equity rising from 1.2x in FY09 to 1.7x and 2x in FY12 and FY13 and higher interest cost leading to
bottomline decline of 27.6% & 37.2% YoY, respectively, in FY12 & FY13
Acquires Joy Mining Services to expand its footprint into underground mining
Divests its stake in Joy Mining Services
Recovery in stock price as inflows remain buoyant
Recovery in stock price on the back of formation of stable government at the centre and it's 10 year agenda to focus on infrastructure
Surge in the stock price post Finance Ministry's two-pronged plan to boost infrastructure investment
The government plans to award road construction projects worth | 1.26 lakh crore during FY16. It is targeting to award a total of 273 projects covering a total
length of 12,900 kms which would offer humungous opportunities for Simplex Infrastructure

Source: Company, ICICIdirect.com Research

Top 10 Shareholders
Rank Name
1
Anupriya Consultants Pvt. Ltd.
2
RBS Credit & Financial Developments Pvt. Ltd.
3
Reliance Capital Asset Management Ltd.
4
HDFC Asset Management Co., Ltd.
5
Mundhra (Bithal Das)
6
Mundhra (Yamuna)
7
Mundhra (Amitabh Das)
8
Baba Basuki Distributors Pvt. Ltd.
9
Mundhra (Rajiv)
10 Nuvo ChrysCapital Advisors Pvt. Ltd.
Source: Reuters, ICICIdirect.com Research

Shareholding Pattern
Latest Filing Date % O/S Position (m) Change (m)
30-Sep-15 0.14
7.09
0.00
27-Oct-15 0.10
4.77
0.01
30-Sep-15 0.09
4.48
(0.00)
30-Sep-15 0.09
4.43
0.00
30-Sep-15 0.06
2.79
0.00
30-Sep-15 0.05
2.29
0.00
30-Sep-15 0.04
2.01
0.00
30-Sep-15 0.04
2.00
0.00
30-Sep-15 0.04
1.87
0.00
30-Sep-15 0.03
1.47
0.00

(in %)
Promoter
FII
DII
Others

Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

56.41 56.41 56.41 55.99 55.99
12.21
9.42
5.64
5.76
6.07
18.35 21.16 24.42 24.25 23.79
13.03 13.01 13.53 14.00 14.15

Recent Activity
Buys
Investor name
Standard Life Investments Ltd.
RBS Credit & Financial Developments Pvt. Ltd.

Value
0.11
0.04

Shares
0.02
0.01

Sells
Investor name
SBI Funds Management Pvt. Ltd.
HSBC Global Asset Management (Hong Kong) Limited
J.P. Morgan Asset Management (Hong Kong) Ltd.
UTI Asset Management Co. Ltd.
Baroda Pioneer Asset Management Company Limited

Value
(4.5)
(3.6)
(0.5)
(0.1)
(0.1)

Shares
(1.0)
(0.6)
(0.1)
(0.0)
(0.0)

Source: Reuters, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 10

Financial summary
Profit and loss statement
(| Crore)
Net Sales
Growth (%)
Raw Material Cost
Employee Cost
Other Expenditure
Total Operating Expenditure
EBITDA
Growth (%)
Other income
Depreciation
EBIT
Interest
PBT
Tax
Rep. PAT
Adjustment
Adj. Net Profit
Growth (%)
EPS (|)

| Crore
FY14
5,513.0
-5.3
1,961.2
1,880.3
1,081.7
4,923.2

FY15
5,581.6
1.2
1,874.6
2,039.4
1,039.1
4,953.1

FY16E
5,766.1
3.3
2,254.5
1,856.7
991.8
5,103.0

FY17E
6,474.3
12.3
2,550.9
2,071.8
1,120.1
5,742.7

589.8
9.6
39.4
203.9
425.3
339.7
85.6
25.0
60.6
0.0
60.6
8.1
12.2

628.5
6.6
53.0
203.3
478.2
384.3
93.9
31.5
62.4
0.0
62.4
3.1
12.6

663.1
5.5
76.7
203.3
536.5
428.2
108.3
35.1
73.2
0.0
73.2
17.2
14.7

731.6
10.3
58.3
210.5
579.4
429.2
150.1
50.9
99.2
0.0
99.2
35.6
20.0

Source: Company, ICICIdirect.com Research

| Crore
FY14

FY15

FY16E

9.9
1,432.3
1,442.2
3,225.3
191.9

9.9
1,505.4
1,515.3
3,225.3
191.9

9.9
1,604.7
1,614.6
3,200.3
191.9

4,543.9

4,859.4

4,932.6

5,006.8

1954.3
790.5
1163.8
53.1
1216.9

2068.7
952.7
1116.0
4.9
1120.8

2235.7
1165.0
1070.7
4.9
1075.5

2315.7
1375.5
940.2
4.9
945.0

134.1

147.6

125.0

161.0

Inventories
Trade Receivables
Cash
Loans & Advances
Other current assets
Total current assets
Current Liab. & Prov.
Net Current Asset

861.9
2095.1
80.7
758.9
2139.1
5935.7
2742.7
3193.0

952.4
2165.4
22.7
865.8
2564.5
6570.9
2979.9
3591.0

954.4
2088.8
110.0
803.4
2775.9
6732.4
3009.4
3723.1

1161.2
2319.6
92.4
991.1
3004.7
7569.1
3677.3
3891.8

Application of funds

4,543.9

4,859.4

4,932.6

5,006.8

Investment

| Crore
FY14
85.6
203.9
300.2
-25.0
564.6
179.2
-76.9
13.1
-334.5
-163.5
181.9
-61.8
166.4
104.6
-89.7
50.2
-39.5
247.1
72.0
80.7

FY15
93.9
203.3
344.1
-46.9
594.4
-70.3
-90.5
-106.9
-425.4
237.2
138.3
-66.2
174.3
108.1
-100.0
-3.0
-103.0
143.5
80.7
22.7

FY16E
108.3
203.3
376.3
-35.1
652.8
76.7
-1.9
62.4
-211.4
29.5
608.0
-167.0
74.5
-92.5
-428.2
0.0
-428.2
87.3
22.7
110.0

FY17E
150.1
210.5
371.0
-50.9
680.7
-230.9
-206.8
-187.7
-228.8
667.9
494.4
-80.0
22.3
-57.7
-454.2
0.0
-454.2
-17.5
110.0
92.4

FY14

FY15

FY16E

FY17E

12.2
53.3
281.5
1,110.4
16.3

12.6
53.5
290.5
1,124.2
4.6

14.7
55.7
305.2
1,161.3
22.1

20.0
62.4
325.2
1,304.0
18.6

10.7
1.6
1.1
206.1
77.8
105.3

11.3
1.7
1.1
233.3
94.7
109.4

11.5
1.9
1.3
228.7
106.2
111.2

11.3
2.3
1.5
214.2
104.8
100.8

4.5
9.3
9.9

4.4
9.4
10.3

4.9
9.8
11.1

6.3
10.9
11.9

19.3
6.8
0.7
0.8

18.8
7.0
0.8
0.8

16.0
6.5
0.7
0.8

11.8
5.8
0.7
0.7

4.8
2.0
2.2
2.1

5.1
2.2
2.2
2.2

4.7
2.1
2.2
2.2

4.2
1.9
2.1
2.0

Key ratios

FY17E

9.9
1,387.9
1,397.8
2,938.8
207.3

Sources of funds
Assets
Gross Block
less: Acc. Depreciation
Net Block
Capital WIP
Net Fixed Assets

(| Crore)
Net Profit before tax
Depreciation & Amortisation
Others
Direct tax paid
CF before change in WC
Inc/Dec in Trade Recv.
Inc/Dec in Inventories
Inc/Dec in Loans & Adv
Inc/Dec in other current assets
Inc/Dec in cur liabilities
CF from operations
Purchase of Fixed Assets
(Inc)/Dec in investments
CF from investing
Interest and debt repayments
Inc/(Dec) in Net worth
CF from Financing
Net Inc/Dec in cash & eq.
Opening cash balance
Closing cash balance

Source: Company, ICICIdirect.com Research

Balance sheet
(| Crore)
Liabilities
Equity capital
Reserves & Surplus
Shareholder's fund
Secured & unsecured debt
Deferred Tax Liablity

Cash flow statement

Per share data (|)

EPS
Cash EPS
BV
Revenue per share
Cash Per Share
Operating Ratios (%)
EBITDA Margin
PBT / Net Sales
PAT Margin
Working Capital (ex cash) days
Debtor days
Creditor days
Return Ratios (%)
RoE
RoCE
RoIC
Valuation Ratios (x)
P/E
EV / EBITDA
EV / Net Sales
Price to Book Value
Solvency Ratios (x)
Debt/EBITDA
Net Debt / Equity
Current Ratio
Quick Ratio

Source: Company, ICICIdirect.com Research

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 11

ICICIdirect.com coverage universe (Construction)

CMP
M Cap
Sector / Company
(|) TP(|) Rating (| Cr)
63
80
Buy 3,552
NCC (NAGCON)
861 1,100
Buy 11,480
NBCC (NBCC)
236 350
Buy 1,172
Simplex Infra (SIMCON)
Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

EPS (|)
P/E (x)
EV/EBITDA (x)
P/B (x)
RoE (%)
FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E
2.0
3.5
4.3 31.8 18.2 14.9 8.0
7.8
7.3 1.1
1.1
1.0
3.5
5.8
6.8
20.8 23.3 29.9 40.1 35.7 27.9 34.6 27.6 21.2 8.4
4.4
3.9 20.9 12.2 14.1
12.6 15.6 31.2 27.1 21.9 10.9 7.8
7.1
5.9 1.2
1.1
1.0
4.4
5.2
9.7

Page 12

RATING RATIONALE

ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns

ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;

Pankaj Pandey

Head Research

pankaj.pandey@icicisecurities.com

ICICIdirect.com Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai 400 093
research@icicidirect.com

ICICI Securities Ltd | Retail Equity Research

Page 13

Disclaimer
ANALYST CERTIFICATION

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view(s) in this report.

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Page 14