Buy Cemindia Projects: target of Rs 1550: ICICI Securities

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Order momentum: Cemindia has reported strong order inflows, with YTD order intake of ~INR 145bn, and a robust external bid pipeline of INR 1.3trn, providing strong order visibility.
  • Execution and revenue growth: The company has seen revenue growth of 26% YoY to INR 27.5bn, with improved execution signaling new order wins coming into the execution phase.
  • Margin expansion: EBITDA margins have improved 40bps YoY to 9.7%, with full-year margins expected at ~10.5%.
  • Fundraising and capex: Cemindia has raised INR 14bn through QIP, primarily to fund TBM purchases, enabling it to pursue large tunnelling opportunities.

Thesis Validation Checklist

To validate the investment thesis, investors should watch for: continued strong order inflows, successful execution of existing orders, margin expansion, and effective utilization of the QIP proceeds for growth initiatives. Key risks include lower-than-anticipated order inflows and execution issues.