dkishore
02-01-2008, 07:52 AM
Indiabulls Research is bullish on Punj Lloyd and has recommended buy rating on the stock in its December 28, 2007 reports. “Punj Lloyd Limited (PLL) reported impressive results on the back of robust order inflow and timely execution of the order backlog. Net sales stood at Rs. 18,942.1 million as the Company reported a 59.9% yoy growth in sales. PLL’s order backlog was Rs. 148.5 billion as on September 30, 2007. EBITDA jumped 138.8% yoy to Rs. 1,665.5 million due to the savings in employee costs and other expenditure while EBITDA margin improved 290 bps yoy to 8.8%. On a yoy basis, net profit grew 168% to Rs. 894.7 million while net profit margin improved 190 bps on account of savings in operating costs and higher other income.”
The report also says, “The oil & gas sector is witnessing increased activity in the domestic market; as a result, we expect PLL’s pipeline division to benefit from this trend. Realising the benefits available from this sector, the Company acquired 22.2% stake in Pipavav Shipyard which will be used as a fabrication unit for vessels and building off-shore platforms. It also made a strategic move by setting up a subsidiary for integrated drilling services, Punj Lloyd Upstream Ltd (PLUL), to benefit from the acute shortage of rigs across the globe. Moreover, Sembawang’s extensive expertise in construction has helped PLL bag two contracts in Singapore worth more than Rs. 30 billion. We expect all these factors to add value to the business and improve bottomline. PLL is currently trading at a P/E of 48.1x for FY08E and 30.1x for FY09E. We maintain our Buy rating with a target price of Rs 650.”
The report also says, “The oil & gas sector is witnessing increased activity in the domestic market; as a result, we expect PLL’s pipeline division to benefit from this trend. Realising the benefits available from this sector, the Company acquired 22.2% stake in Pipavav Shipyard which will be used as a fabrication unit for vessels and building off-shore platforms. It also made a strategic move by setting up a subsidiary for integrated drilling services, Punj Lloyd Upstream Ltd (PLUL), to benefit from the acute shortage of rigs across the globe. Moreover, Sembawang’s extensive expertise in construction has helped PLL bag two contracts in Singapore worth more than Rs. 30 billion. We expect all these factors to add value to the business and improve bottomline. PLL is currently trading at a P/E of 48.1x for FY08E and 30.1x for FY09E. We maintain our Buy rating with a target price of Rs 650.”