For 2QFY2016, MBL Infrastructures (MBL) reported a 16.8% yoy top-line growth to Rs406cr. The company reported a yoy decline in EBITDA margin to 11.7% for the quarter. During 2QFY2015, MBL had received Rs5cr as escalation amount from the Guwahati project. On adjusting for the same, the EBITDA margin declined 202bp yoy. Fall in yoy EBITDA margin reflects (1) 85.8% increase in other expenses (to Rs29cr) and 82.8% increase in labor and sub-contracting costs (to Rs28cr). The 41.5% yoy increase in employee expenses is mainly on account of induction of new employees into the company in earlier quarters. Despite strong execution, EBITDA decline on a yoy basis percolated to the PAT level; PAT declined by 17.6% yoy to Rs18cr. The Reported PAT margin of the company declined from 6.2% a year ago to 4.4% in 2QFY2016. MBLs unexecuted order book as of 2QFY2016 stands at ~Rs2,150cr (order book to LTM revenues is at 1.0x). With 3 BOT projects expected to commence tolling in FY2016-2017E and Management clarifying that it does not intend to add any new BOT projects to the companys portfolio till FY2017, we are confident that MBLs D/E ratio would peak out in FY2017E at 2.3x. Outlook and valuation:...