S.P.Tulsian, Investment Advisor Report Dated: Mar 31, 2009
Unity Infraprojects is a Mumbai based engineering and construction company providing integrated engineering and construction services on a turnkey basis including electrical, fire prevention and control, plumbing and air conditioning which is resulting in a higher margin. The company has been undertaking projects across the country for road projects, PWD. Municipal Corporations, State Govt and local authorities and have orders in hand of close to Rs 2,000 crores which would get completed in next two years. To execute the projects in time and to maintain its smooth implementation with better margins the contracts are taken of safe and remunerative projects only by the company.
The company went public in May, 2006 and paid up equity of the company is quite low at Rs 13.37 crores with face value of Rs 10 each. Promoters stake is at 70% while mutual funds, banks and FIIs hold about 20% while 10% is held by the general public. For FY 08 the total income of the company was at Rs 862 crores with PBT of Rs 91 crores and PAT of Rs 60 crores resulting in an EPS of Rs 45. Dividend of 40% was paid by the company for the year. For first 9 months of FY09, the total income of the company was at Rs 756 crores with PBT of Rs 71 crores and PAT of Rs 49 crores giving an EPS of Rs 37. Though there is drop in the margin it is more than compensated with increase in the topline. Hence, FY09 is likely to have an EPS of Rs 50 with expected PAT at Rs 67 crores. Topline for the year is likely to above Rs 1,000 crores. Share had its 52 week high/low of Rs 641 and Rs 67 and now ruling at Rs 73.85. This implies a PE multiple of close to 1.5 times. Book value per share will be over Rs 300 as at 31-3-09 even after presuming a dividend payment of Rs 5 per share. The company has a net debt of close to Rs 200 crores which is considered quite low, considering the level of activity. The company has a strong presence in Mumbai City and are known for timely completion, which are keys to success for any civil contracting company. Share at Rs 73.85 qualifies a risk free and safe buy for those who have a 6 months view, in which share has potential to touch three digit mark with virtually no downside risk.