26-Dec-2017 : Capacite Infraprojects is a fast growing construction company, which provides end to end services for residential, commercial and Institutional building with presence in Mumbai Metropolitan Region , Pune Chennai, National Capital Region, Kochi, Hyderabad and Bengaluru. The company works for a number of reputed companies like Kalpataru, Wadhwa group, Lodha group, Oberoi Construction, Godrej Properties, Brigade Enterprises etc. The company has expertise in constructing high rise building. As on 30th May, 2017, the company’s order-book has 16.81% Super High rise building and 33.65% High rise building.
Of late Capacite Infraprojects came out with an IPO to raise Rs 400 crore via fresh issue of equity shares of Rs 10 each in the price band of Rs 245 to Rs 250 per share. The issue saw huge response from the investors. The overall issue was subscribed 183 times and the stock was listed at Rs 399, up 59.6% from its issue price of Rs 250.
Capacite Infraprojects has good track record for successful completion of the projects on time. Its EPS has increased 82.28% CAGR in the last four years though on low base. The debt equity ratio also is hovering around a comfortable range of 0.19. Return on equity of the stock remains constantly above 20. The company has an order book of Rs 4705 crore at the end of September 30, 2017. It represents around 4 times the FY 2017 revenue. Recently in November, the company bagged an order from Arihant Abode worth Rs 825 crore for the construction works of the project “Arihant Aspireâ€.
In the first half of financial year 2018, the company’s revenue increased by 16.1% from Rs 513 crore to Rs 596 crore. EBIDTA increased by 9.7% to 99 crore. PAT increased from 26 crore to 34 crore, an increase of 28.5%.
| Particulars (Crore) | H1 FY 18 | H1 FY 17 | YoY |
|---|---|---|---|
| Total Income | 596 | 513 | 16.1% |
| EBIDTA | 99 | 90 | 9.7% |
| PAT | 34 | 26 | 28.5% |
| Margin | 5.7% | 5.1% | |
| Diluted EPS | 7.16 | 5.52 | |
| Cash PAT | 64 | 57 | 12.4% |
| Cash EPS | 13.66 | 12.06 | |
On the back of strong order book and successful execution, we believe that coming couple of years will be quite good for the company. Apart from the private residential projects, the company also has the plan to commence working on the government projects. Hence, apart from the private order inflow, there are ample opportunities in Government’s smart city and mass housing projects. Being a niche player in the high rise segment, the company has huge potential to grow.
Capacite Infraprojects is currently hovering around the level of Rs 392. If we extrapolate the first half EPS, the FY 18 projected PE is 27.37 at the current price of Rs 392. Since the second half is always better than the first half for the most of the construction companies, we believe that current price is justified. As the order execution picks up pace in the next financial year, the stock should achieve new high. On conservative basis, we believe that stock should gain at least 50% i.e. Rs 588 in the next 12 months to 18 months.
NSE Code : CAPACITE
BSE Code : 540710
Written by Research Analyst (SEBI Registered) Suvendu Manna
Disclaimer : The research analyst has position in the stock as on the date of writing this article.
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