Target: ₹915
CMP: ₹676.80
We understand its second level management team is currently young and grooming under the leadership of its Chairman. The company has maintained the order inflow guidance at ₹2,500 crore for FY23.
Company mentioned that it has a bid pipeline of ₹4,000 crore which includes L1 order of ₹3,500 crore from Gujarat govt, Gem and Jewellery sector order of ₹1,200 crore, Industrial project in Hazira of ₹250 crore, Surat Municipal building order of ₹1,100 crore, IT Park Chennai ₹400 crore, Hospital in Chennai of ₹200 crore. On slow moving order, court hearing concluded for Bhiwandi order (₹600 crore) and awaits judgment and there is a status quo on Pandharpur order of ₹130 crore.
Execution of Surat Diamond Bourse (SDB) has enabled PSP to participate in tender size of ₹2,000 crore+ which earlier was 1/3rd of it. With built up area of 6.7mn sq feet, SDB boast as largest office building in the world. PSP executed the project as principle contractor at cost of ₹1,900 crore (initial est. of ₹1,600 crore) in 49 months (including Covid disruption).
Revenue growth guidance has been maintained. Execution is picking up post subdued Q2FY23, implying 2HFY23 yoy revenue growth at 35 per cent.
Maintain Buy rating with revised TP of ₹915 (earlier ₹715) as we roll forward valuation (of 12x PER) to FY25.