Construction and Infrastructure- Sept'20

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Construction and Infrastructure- Sept'20 Construction and Infrastructure- Sept’20 VP Research: Shravan Shah Associate: Maulik Shah/Parth Bhavsar Tel: +91 22 40969749 Tel: +91 22 40969775/40969775 E-mail: [email protected] E-mail: [email protected]/[email protected] October 07, 2020 October 07, 2020 2 Monthly Update - Sept 2020 Announcement of New Investments . New investments up after declining for thirteen consecutive months by 116.0% ACIL YoY to Rs911 bn (up 47.1% MoM) in Sept’20, primarily due to rise in Irrigation/ CMP / Target Road/ Mining/ Manufacturing. New investments announced in YTD21 Rs229/Rs266 decreased by 50.5% YoY to Rs3,181 bn owing to the fall in Others/ Railways/ Power/ Real Estate which was partially offset by rise in Irrigation. DBL . Irrigation segment saw a major portion of new investments with 26.1% share CMP / Target Rs 3 51 / Rs 403 followed by Road/ Manufacturing at 18.6%/ 12.0% in Sept’20. HG Infra . In terms of geographical spread, Chhattisgarh took the lead with 32.2% share followed by Bihar with 9.7% share. CMP / Target Rs 1 84 / Rs 3 30 . The major projects announced in Sept’20 includes Bodhghat Multipurpose Project (Rs226.5 bn), Delhi-Amritsar-Katra Expressway Pkg 5/ Pkg 1/ Pkg 3 (Rs11 J Kumar bn/ Rs10.5 bn/ Rs9 bn) and Calcined Needle Coker Paradip project (Rs12.7 bn). CMP/ Target Rs 1 10 / Rs 1 33 Tenders Published KNR . Tenders issued increased by 35.3% YoY to Rs742 bn in Sept’20 mainly due to CMP / Target Rs 2 55 / Rs 337 Road/ Mining segment. Tenders published in YTD21 increased 71.7% YoY to Rs3,506 bn mainly due to rise in Road/ Mining/ Water/ Real Estate. NCC . Major tenders published are in the Road, Railways and Mining sectors with CMP / Target Rs 3 4 / Rs 33 28.5%, 16.3% and 13.4% share respectively. Bihar had the highest share of 14.7% followed by UP with 11.9% share. PSP . Major tenders announced in Sept’20 include 5 packages of Delhi-Amritsar- CMP / Target Rs 4 07 / Rs 5 16 Monthly Update Monthly Katra Expressway (Rs47.5 bn), design & construction of twin tunnel at Rajendra Nagar and six underground metro stations (Rs19.6 bn) and development & PNC operation of Pelma OC in Raigarh Area, Mand-Raigarh coalfield (Rs44.2 bn). CMP / Target Rs163/Rs271 . Tenders live: NHAI Rs413 bn (HAM 65%, EPC 34%), Other Road Rs185 bn (EPC 54%) and Others Rs1,046 bn. *CMP as on 7 Oct 2020 Projects Awarded . Order awards down 34.1% YoY to Rs313 bn due to fall in orders mainly in Real Estate/ Manufacturing segment which was partially offset by Mining. Projects awarded in YTD21 decreased 24.9% YoY to Rs1,140 bn on account of Real Estate/ Power/ Manufacturing segment which was partially offset by Mining segment. Mining/ Road/ Railways comprised 32.5%/ 16.6%/ 16.3% respectively of total orders awarded in Sept’20. Higher concentration of orders occurred in Maharashtra in Sept’20 with 29.9% share. Excavation of overburden of first dig at Bina extension OCP (Rs18.6 bn – BGR Mining), construction & upgradation of Narenpur to Purnea (Rs19.1 bn, Dilip Buildcon) and railway electrification works for various routes (Rs19.0 bn, Ircon International). Dilip Buildcon won major orders comprising 9.7% of total awards. October 07, 2020 Valuation Matrix Company Revenue (Rs bn) EBITDA (Rs bn) PAT (Rs mn) EBITDA margin (%) Order book (Rs bn) FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E ACIL 17.5 18.8 15.6 19.1 2.2 1.5 1.2 2.3 1,173 644 439 1,188 12.3 8.1 7.8 12.0 54.7 74.6 79.0 89.9 DBL 91.4 89.8 85.8 94.4 16.3 15.7 13.7 15.6 5,732 4,160 2,358 3,654 17.8 17.5 16.0 16.5 211.7 190.8 254.9 261.4 HGINFRA 20.1 22.0 23.6 29.0 3.0 3.4 3.5 4.4 1,236 1,657 1,646 2,174 15.1 15.6 15.0 15.0 62.2 71.0 77.4 88.4 JKIL 27.9 29.7 23.9 32.7 4.4 4.3 2.9 4.6 1,771 1,836 476 1,694 15.7 14.4 12.1 14.0 101.9 116.6 132.8 140.1 KNR 21.4 22.4 27.0 31.9 4.3 4.9 4.7 5.6 2,658 2,018 2,112 2,683 20.0 21.7 17.5 17.5 40.2 52.3 78.3 81.4 NCC 120.8 82.2 69.1 82.3 14.2 10.3 7.9 9.6 6,228 2,616 1,504 2,481 11.8 12.5 11.4 11.6 331.8 250.1 281.0 318.7 PSP 10.4 15.0 13.6 16.5 1.5 1.9 1.5 2.1 902 1,293 983 1,428 14.3 12.7 11.2 13.0 29.8 30.7 37.2 55.7 PNC 31.0 48.8 48.8 58.1 4.6 7.6 6.8 8.0 2,157 3,515 3,182 4,238 14.8 15.7 13.8 13.8 122.1 86.3 149.6 161.6 Company CMP* TP Mcap EV/EBITDA (x) P/E (x) RoCE (%) RoE (%) (Rs) (Rs) (Rs bn) FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E ACIL 229 266 16.7 6.4 8.7 10.5 5.4 13.1 23.8 34.9 12.9 19.5 12.4 9.8 17.3 17.2 8.4 5.3 13.1 DBL 351 403 50.9 5.0 4.9 5.8 4.8 8.4 11.5 20.4 13.1 21.5 15.3 12.0 13.1 21.5 12.6 6.4 9.1 HGINFRA 184 330 12.8 4.9 4.2 4.1 3.3 9.7 7.2 7.3 5.5 17.5 19.7 17.6 18.9 20.6 22.4 18.2 19.9 JKIL 110 133 8.3 2.4 2.4 3.2 2.4 4.7 4.6 17.6 4.9 12.0 11.4 5.9 9.9 11.1 10.5 2.6 8.7 KNR 255 337 36.6 9.0 7.8 7.8 6.1 13.5 17.8 17.0 13.4 21.7 17.8 14.1 15.7 20.8 13.4 12.3 13.7 NCC 34 33 18.7 2.6 3.5 4.4 3.5 3.3 8.0 13.9 8.4 17.7 14.0 9.9 10.7 13.6 5.3 2.9 4.6 PSP 407 516 15.1 8.5 7.0 8.3 5.4 16.2 11.3 14.9 10.3 27.8 31.3 20.0 24.1 26.8 31.2 19.8 23.8 PNC 163 271 39.8 9.3 4.9 6.1 5.4 19.4 11.9 13.1 9.9 19.9 23.7 14.7 15.9 11.6 15.8 12.0 13.9 Sources: Company, DART *CMP as on 7 Oct 2020 October 07, 2020 4 Announcement of New Investments . New investments announced up after declining for thirteen consecutive month by 116.0% YoY to Rs911 bn (up 47.1% MoM) in Sept’20, primarily due to rise in Irrigation/ Road/ Mining/ Manufacturing by 1762.3%/ 224.4%/ 166575%/ 145.4% YoY to Rs238 bn/ Rs169 bn/ Rs67 bn/ Rs109 bn which was partially offset by fall in Power by 68.9% YoY to Rs40 bn. New investments announced in YTD21 decreased 50.5% YoY to Rs3,181 bn owing to the fall in Others/ Railways/ Power/ Real Estate by 76.4%/ 97.0%/ 67.9%/ 59.0% YoY to Rs413 bn/ Rs16 bn/ Rs229 bn/ Rs329 bn which was partially offset by rise in Irrigation by 83.7% YoY to Rs337 bn. Irrigation segment accounted for highest share at 26.1% in total value. Bodhghat Multipurpose Project (Rs226.5 bn) is the major project announced. Road comprised 18.6% of the total value in Sept’20. Delhi-Amritsar-Katra Expressway Pkg 5/ Pkg 1/ Pkg 3 (Rs11 bn/ Rs10.5 bn/ Rs9 bn) are the major projects announced. Manufacturing comprised 12.0% of the total value in Sept’20. Calcined Needle Coker Paradip project (Rs12.7 bn) is the major project announced. Higher concentration of new investments announced was seen in Chhattisgarh with 32.2% share followed by Bihar with 9.7% share. New Investments announced increased 116.0% YoY to Rs911 bn in Sept’20 New Investments (Rs bn) Sectors Sep-19 Sep-20 MoM (%) FY16 FY17 FY18 FY19 FY20 YTD21 Roads 52 169 256.8 2,762 3,265 5,137 2,699 1,199 452 Growth YoY % 224.4 36.9 18.2 57.4 (47.5) (55.6) (29.6) Community 35 21 (52.1) 476 439 417 482 371 162 Growth YoY % (40.8) 55.6 (7.7) (5.1) 15.5 (22.9) (18.5) Irrigation 13 238 223.5 520 338 688 475 252 337 Growth YoY % 1762.3 5.8 (35.0) 103.3 (30.9) (47.0) 83.7 Water 30 76 578.7 319 446 830 713 1,070 149 Growth YoY % 152.3 (56.4) 39.7 86.1 (14.1) 50.1 (17.2) Railway 6 8 17.0 1,756 3,503 1,711 2,458 906 16 Growth YoY % 34.9 (35.5) 99.5 (51.2) 43.7 (63.1) (97.0) Power Distr.
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