Target: ₹450

CMP: ₹317.20

Ceigall India (CIL) has rapidly scaled up operations over the last 5 years, transitioning from a small construction company into an established EPC player while maintaining profitability and balance sheet health. We expect CIL’s robust order backlog of ₹12,200 crore (3.8x revenue) to deliver revenue/EPS CAGR of 22/18 per cent over FY24-27E.

CIL will continue its journey of segmental diversification to widen its opportunities to support growth. We expect its balance sheet to remain lean with net debt/EBITDA of (0.5x) in Mar’27. CIL plans to monetise 3 HAM assets in the medium term, which will release growth capital and further strengthen the balance sheet.

Valuations at 13x/11x FY26/27 EPS (prior to adjustment for value of assets) are attractive and at 20-25 per cent discount to peers. With CIL firmly establishing itself as a prime contractor, we see room for valuations to re-rate. We initiate coverage with a Buy rating and a SoTP-based price target of ₹450.

In Highways space, we prefer Ceigall India, HG Infra Engineering and GR Infraprojects.

Slower-than-expected ordering by NHAI and further rise in competition, potential mistakes in bidding or execution in newer segments as the company is actively looking to diversify into newer segments and delay in start date/execution of projects are key risks.

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