PSP Projects Q3 Results Review - Robust Order Book To Drive Growth: Axis Securities

PSP has a strong order book comprising both public, private sector projects, which implies revenue visibility for next 2-3 years.

<div class="paragraphs"><p>A residential project Dharnidhar Pride developed by PSP Projects Ltd. (Source: Company website)</p></div>
A residential project Dharnidhar Pride developed by PSP Projects Ltd. (Source: Company website)

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Axis Securities Report

PSP Projects Ltd.'s Q3 FY23 numbers were below our expectations due to lower sales, an increase in construction expenses and a delay in getting approvals for Uttar Pradesh projects. The company reported revenue of Rs 500 crore (up 3% YoY), Ebitda of Rs 62 crore (down 19% YoY), and adjusted profit after tax of Rs 35 crore (down 30% YoY).

It registered Ebitda margins of 12.4% in Q3 FY23 (our estimate: 12.5%) as against 15.6% in Q3 FY22. PSP Projects reported adjusted profit after tax margins of 7.1% in Q3 FY23 against 10.4% in Q3 FY22.

The decrease in other income is due to the reversal of impairment charges worth Rs 2 crore to the company’s subsidiary.

The order book break up is as follows: 34% from the government (Rs 1,704 crore), 18% from the government residential (Rs 936 crore), 11% from industrial (Rs 572 crore), 26% from institutional (Rs 1,299 crore), and 11% from residential (Rs 563 crore). Geographywise, out of the current executable projects, Gujarat constitutes 53%, UP 32%, Maharashtra 14%, and Rajasthan 0.5%.

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Axis Securities PSP Projects Q3FY23 Results Update.pdf

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