PSP Projects share price: Buy PSP Projects, price target Rs 705: HDFC Securities

Securities has a call to buy on the PSP projects with a target price of Rs 705. The current market price of . is Rs 508.35. The period given by the analyst is one year when the price Ltd. can achieve the set goal.

PSP Projects Ltd., incorporated in 2008, is a small capitalization company (having a market capitalization of Rs 1836.90 Crore) operating in the construction sector.

The main products/revenue segments of PSP Projects Ltd. includes contract revenue and other operating revenue for the year ending March 31, 2021.

finance

For the quarter ended 31-03-2022, the company reported consolidated total revenue of Rs 559.37 Crore, up 13.08% from last quarter, total revenue of Rs 494.69 Crore and up up 10.91% from the same quarter last year, total revenue of Rs 504.36 Crore. The company reported a net profit after tax of Rs 54.83 Crore last quarter.

Investment rationale
PSP Projects (PSP) recorded Revenue/EBITDA/APAT of INR 5.6/0.8/0.5 million beating estimates across the board. Its entire order book (OB) of INR 43.2 billion (excluding Bhiwandi and Pandharpur which form 17%) is being executed, which has led to strong revenues. The EBITDA margin, at 15.9%, was strong due to a higher proportion of private orders executed. PSP has handed over the Surat Diamond Bourse (SDB) project and the final certificate of completion is expected by the end of June 22. After that, it will become eligible to bid for a single project worth more than INR 20 billion. The current bid pipeline stands at INR 45 billion, of which 51% of orders are from Gujarat and 52% are private. Revenue is expected to grow by 20-25% YoY in FY23 with order inflow exceeding INR 20 billion. It keeps BUY on PSP with an increased TP of INR 705/sh (13x Mar-24E EPS).

Promoter/Fii Holdings
The promoters held 70.2% of the company’s capital as of March 31, 2022, while the FIIs held 1.78% and the DIIs 4.77%.