Infrastructure share price target

clients, c) lending from banks, d) update on execution given recent rise in Covid cases and e) impact on margins due to steep rise in RM prices. Commentary from most companies was quite positive due to a) strong order pipeline across segments like Buildings, Roads, Railways, Urban Infra, Water supply, Marines, etc., b) pick up in execution, despite surge in Covid cases, c) timely payments from Govt. Authorities & Private clients, d) reduced BG requirements and ability to borrow money at lower interest rate and e) relative stability in margins despite rise in RM prices as most Govt. contracts have an...

clients, c) lending from banks, d) update on execution given recent rise in Covid cases and e) impact on margins due to steep rise in RM prices. Commentary from most companies was quite positive due to a) strong order pipeline across segments like Buildings, Roads, Railways, Urban Infra, Water supply, Marines, etc., b) pick up in execution, despite surge in Covid cases, c) timely payments from Govt. Authorities & Private clients, d) reduced BG requirements and ability to borrow money at lower interest rate and e) relative stability in margins despite rise in RM prices as most Govt. contracts have an...

We expect a strong execution in Q3FY21 vs H1FY21 for our infra coverage universe with average revenue expected to grow by ~5.3% YoY vs decline of 17%/ 44% in Q2/Q1FY21. We expect EBITDA margins to sequentially show sharp recovery as operating leverage kicks in. Adjusted PAT is expected to rise by an...

The roads and highways sector has demonstrated strong resilience to the Covid-19 disruptions with robust ordering activities (NHAI awarded 1,330 km in H1FY21; up 1.6x YoY) and improving construction pace. Additionally, measures such as a) shifting from milestone-based billing to monthly billing, b) releasing of retention money/performance security in proportion to execution, c) faster resolution of disputes through reconciliation and d) revision of model concession agreement (MCA) for HAM and BOT projects ensured continuance of gained momentum and safeguarded contractor's...

1Q a washout: We expect 1QFY21 to be a wash-out quarter for our infra coverage universe with an average revenue fall of ~65-70% YoY. This would be primarily attributed to a) nationwide lockdown and Covid-19 pandemic halting construction activities across the country, b) concerns on availability of labour force (average availability of 15-25% pre-Covid levels) and c) stoppage of toll collection in Apr'20 followed by sluggish pick-up in operations thereafter. We expect most companies to report EBITDA loss as fixed expense remains high resulting into negative operating leverage. Adjusted PAT is expected to fall sharply by ~273% YoY due to...

1Q a washout: We expect 1QFY21 to be a wash-out quarter for our infra coverage universe with an average revenue fall of ~65-70% YoY. This would be primarily attributed to a) nationwide lockdown and Covid-19 pandemic halting construction activities across the country, b) concerns on availability of labour force (average availability of 15-25% pre-Covid levels) and c) stoppage of toll collection in Apr'20 followed by sluggish pick-up in operations thereafter. We expect most companies to report EBITDA loss as fixed expense remains high resulting into negative operating leverage. Adjusted PAT is expected to fall sharply by ~273% YoY due to...

Construction remains one of the most severely impacted sectors due to the Covid-19 lockdown. The tolling at highways was stopped given the lockdown while execution of EPC/HAM projects has come to a blanket halt amid unavailability of labour and raw materials. We expect labour unavailability to persist even once the lockdown is lifted as it could take time for remobilisation of labourers. Also, even if the work at project sites resume within one or two weeks post the lockdown, the onset of the monsoon season from Q2FY20E could slow down execution, going ahead. Amid these...

Top Picks: KNR , PNC, HG Infra, Capacite & Ahluwalia We hosted the 3rd Annual Infrastructure Investor Forum in Mumbai with 9 corporates participating in the event. The participating corporates were across the spectrum of (1) Transportation Sector (Ashoka Buildcon, HG Infra, JMC Projects, KNR Construction, PNC Infratech, Sadbhav Engineering), (2) Buildings segment (Ahluwalia Contracts, Capacite Infraprojects), (3) Power T&D; (KEC International).

The finance ministry's Rs 102tn National Infrastructure Pipeline (NIP) for India over FY20-FY25 comes as a major boost for the sector.