Prabhudas Lilladher is bullish on RPP Infra Projects has recommended buy rating on the stock with a target price of Rs 385 in its research report dated February 19, 2018.
Prabhudas Lilladher 's report on RPP Infra Projects
RPP Infra (RPP) reported strong execution with stable margins. Revenues came in at Rs1.37bn, up 75.1% YoY in Q3FY18, EBITDA at Rs181mn was up 76.9% YoY, while EBITDA margins were up 10bps YoY at 13.2%. PBT was up 156% YoY to Rs144mn. However, at the net level, they reported a loss of Rs93mn due to accounting for a prior period Tax Expense of Rs. 179.6mn pertaining to previous years. RPP Infra has guided for revenues of ~Rs6.5bn with ~14-15% EBITDA margins in FY19.
Outlook
The stock is trading at 11.2x FY20E earnings. We expect RPP to deliver Sales and PAT CAGR of 28%/34%, respectively, over FY17‐20E. We believe the company is a good play on government’s increasing focus on improving rural infrastructure. We maintain a BUY with a TP of Rs385.For all recommendations report, click here
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