Buy PSP Projects; target of Rs 490 HDFC Securities

HDFC Securities research report on PSP Projects

PSP 2QFY21 performance was a minor miss, labour availability has ramped up to pre-COVID levels now. While execution is back on track, order book ramp up remains key from revenue visibility standpoint. PSP remains caught between growth and BS balance, FCFF has deteriorated due to pandemic and funding of suppliers, whilst PSP extension of SDB project completion timeline has impacted Govt project eligibility. Long term focus remains on Building & Factories segment with growth likely to pick up from FY22. No change in estimates.

Outlook

We maintain BUY on PSP Projects with a target price of Rs 490/sh (12x Sep-22E EPS).

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