Gayatri Projects Limited is an infrastructure company. The Company focuses on Roads Projects, Industrial Projects and Power Projects. The Company is engaged in construction and project activities. It executes civil works, including roads, canals, airport runways, ports and harbors, dams and reservoirs, and railways across India.
The Company holds interests in infrastructure, power, hospitality, real estate and industry. It has executed projects, consisting of 5,094 kilometers of roads; 2,212 kilometers of irrigation canals, and various industrial projects. The Company has presence in engineering, procurement and construction (EPC), and construction of road, irrigation and industrial projects across India. It owns eight road assets, and three power projects amounting to approximately 5,000 megawatt (MW). The Company's projects include Four Laning of Hyderabad-Karimnagar-Ramagunam Road (SH-1), Sourashtra Branch Canal and Upgradation of Roads from Ramanathpuram to Tuticorin.
Below is an IPO Review at the time of IPO
We present below a technical perspective on Gayatri projects which will help you to take a judicious decision that whether one should go for this stock or not.
In Q1FY2015, the stand-alone revenues of Gayatri Projects Ltd (GPL) declined by 23.0% year on year (YoY) to Rs342 crore on account of execution delays caused by the Telangana related issues facing Andhra Pradesh.
The weakness in the stand-alone performance could continue in Q2 also but the management is quite confident of better order inflow and execution rate from the third quarter of this fiscal. In terms of subsidiaries, Gayatri Infra Ventures (has seven road projects of which six are operational; GPL has a 70% stake and 30% is with private equity) does not require any more equity infusion and all the operational road projects are generating enough free cash after accounting for the interest charges and debt repayments. In power, Gayatri Energy Ventures Pvt Ltd (GEV; a holding company for two power projects of 1,320MW each) also reported a steady progress in construction and the first phase (660MW) of one of its projects (in joint venture with Singapore-based Semcorp Industries) is likely to get commissioned in Q3FY2015. NCC Power projects (GEV: 25%, Sembcorp: 45%, NCC: 30%) is on schedule with the equity requirement of GEV at Rs250 crore, assuming GEV increases its stake to 35%.
The management is hopeful of an improvement in the overall business operations during H2FY2015. Firstly, the order inflow of its stand-alone operations should pick up while issues related to irrigation orders will get sorted out improving the overall stand-alone profitability. Secondly, the two phases of power projects will be commissioned during the period, leading to a re-rating of the valuation of its power assets. Thirdly, debt should gradually reduce with options like raising of equity capital, deferment of debt and monetisation of road asset. We have revised our estimates for FY2015 and FY2016 downwards after factoring in lower execution of orders on account of the issues mentioned above. We maintain Buy on the stock with a price target of Rs180.
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