J Kumar Infraprojects Ltd as the name suggests is a pure infrastructure player. The company originated in 1980 with a modest beginning and in 29 years has become a force to recon with. Today it competes with all the leading infraproject companies. In the last three years the topline and the bottomline of the company have grown at 18.44% and 35.71% respectively. In FY10 and 11 I expect the company to clock a topline and bottomline growth of 28%. Infrastructure has become the backbone of the economy and the Govt. realizing this has initiated time-bound creation of world-class infrastructure that maximizes the role of public-private partnerships (PPPs). Thanks to these initiatives the order book of the company is 1400 crores (3.46 times FY09 revenues). This assumes great importance because the company has an impeccable track record in timely execution of projects. Hence there is great amount of revenue visibility for the company, which should also reflect on the bottomline.
According to the chairman Mr.Jagdish Kumar Gupta "At J.Kumar our core values-ambition, integrity, foresight, discipline, dedication to excellence and teamwork - have guided us over a quarter of a century".
The present backlog of the company remains completely hedged against commodity price fluctuations. This is a great positive for the company going forward. At a CMP of Rs 158.35 (NSE) the company trades at a P/E of just 7.85 and 6.13 times FY10 and FY11 respectively. The stock can be bought at a price level of 158-159 with a 15-month price Target of 345Rs.
Source: Internet (Valuenotes by Manu Jain)
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