Supreme Infrastructure India Ltd - Stock Idea

Supreme Infrastructure India Ltd (SIIL)

Supreme Infrastructure India Ltd. (SIIL) has gained its reputation as fastest growing construction companies in India with proven track record in project execution in Road, Real-estate and allied infrastructure segments. Initially started as roads and buildings contractors, SIIL now has successfully diversified its service offering into power, irrigation, railways and sewerage. SIIL projects are scattered across states. Quality asset book, superior return on capital with low valuation offers good opportunity for investor to buy at current level for potential upside of 24%.

ü  Robust and diversified order book to sustain growth momentum

ü  Sustainable higher operating profit margin due to backward integration

ü  Moving up in value chain

Valuation and Outlook

Diversified skill sets with proven execution track record and superior operating profit margins enable SIIL to go aggressively to secure new contracts to maintain its growth momentum.

With RoE of 22% and RoCE of 18.5% in FY13e, stock currently trades at 4x our earning estimates for FY13e, EV/Sales of 0.7x and EV/EBITDA of 4.5x. Revenue and net profit after tax are expected to grow at CAGR of 21% and 12% respectively over FY13. We set price objective of INR 280 (exit PE of 5x its FY13e earning per share of INR 55.4).

Unicon's Recommendation

Keeping its high growth potential and robust fundamentals, you should buy the stock.  

For the full report, click here.

(Subject to Disclaimer at www.unicon.in)

Gross Domestic Product – Q1FY12 Update

Dear investors,

India's economy grew at its slowest pace during the April-June quarter, as rising interest rates crimped the consumption and investment demand in economy. The slower performance in mining and quarrying, manufacturing and construction sector led to deceleration in the GDP growth to 7.7% from 7.8% in Q4FY11 & 9.3% in Q1FY11...

Click on the link for all the details.

Outlook on TATA Steel

TATA Steel Ltd - Q1FY12 Result Highlights

TATA Steel Ltd (TATA) reported its first quarter consolidated results for FY12 and has registered a net sales growth of 21.6% YoY to INR 328,399 mn which was ~9% above our estimates.

Outlook and Valuations

At CMP the stock is available at EV/EBITDA of 4.8x its FY13e and PE multiple of 6x of its FY13e earnings. Considering the expansion plan and the demand scenario, we believe that the company has potential for improved performance. We recommend BUY on the stock and maintain our price target of INR 690.

Click here for the full Q1FY12 report.