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IDBI Capital Report
PSP Projects Ltd.'s Q1 FY24 (standalone) profit after tax came 18% higher than our estimate.
On revenue front PSP revenue of Rs 5 billion is up +48%YoY and Ebitda margin trajectory down 96 basis points YoY at 12.7%. Though margin is lower YoY but versus guidance its near to upper range.
PSP has maintained revenue and margin guidance and we see revenue increase of 35% plus in FY24E with stable margin. PSP is eying to increase its total addressable market by bidding for engineering, procurement and construction work of station re-development.
After receiving order inflow in FY23 of Rs 34 billion, it target inflow of Rs 30 billion and in Q1 it has achieved 1/4th of it.
We understand that the bid pipeline of Rs 60 billion and capex upcycle to enable to achieve the target.
We have marginally tweaked margin expectations and re-iterate 'Buy' rating with target price of Rs 849 valued at 12 times FY25E earnings per share (earlier target price Rs 825). Stock catalyst is order inflow.
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