Initiating Coverage | Infrastructure
January 10, 2013
Unity Infraprojects
BUY
CMP
`46
Cruising on order inflow
Target Price
`59
Unity Infraprojects (UIP) is one of the fastest growing mid-cap company in the
Investment Period
12 Months
infrastructure space with focus on civil construction segment (residential,
commercial and industrial structure portfolio) and infrastructure projects in
Stock Info
irrigation & water and transportation segments. The company has a healthy order
book of `4,495cr as of 2QFY2013. Given the strong bid pipeline and L1 status
Sector
Infrastructure
for projects worth `1,400cr, we estimate UIP to report a revenue CAGR of 11.5%
Market Cap (` cr)
342
over FY2012-FY2014E. Its focus on high growth buildings and water/irrigation
Net debt (` cr)
539
segment provides confidence on future growth. We initiate coverage with a Buy
rating and a SOTP target price of `59.
Beta
1.5
Comfortable order book-to-sales provides revenue visibility: The company’s order
52 Week High / Low
56/34
book stands at `4,495cr (excluding L1 orders worth `1,400cr) as on 2QFY2013,
Avg. Daily Volume
59,385
thereby translating into a book-to-bill ratio of 2.2x trailing revenues. This gives a
Face Value (`)
2
comfortable revenue visibility for the next two years given the short execution
period of 24-30 months. The order book mix comprises of projects in the civil
BSE Sensex
19,664
(52%), irrigation & WS (21%) and transportation (27%) segments.
Nifty
5,969
Well diversified order book with pan - India presence: UIP initially started off with
Reuters Code
UTIL.BO
a presence in Maharashtra and historically remained skewed towards projects in
Bloomberg Code
UIP@IN
and around Maharashtra. It has come a long way in the last decade, making
its presence felt across India by diversifying into new verticals and bidding for new
projects across the country. As on 30th September 2012, 59.1% of UIP’s order
Shareholding Pattern (%)
book catered to the North, South and East regions of the country.
Promoters
62.7
Foray into asset ownership model: From being a mere EPC player, UIP has forayed
MF / Banks / Indian Fls
6.4
into asset ownership model through its wholly owned subsidiary Unity Infrastructure
Assets Ltd and has bagged 3 BOT projects under its portfolio. The company has
FII / NRIs / OCBs
2.4
started construction activity in one of its road BOT project - the Chomu-Mahla project
Indian Public / Others
28.5
and is in an advanced stage of achieving financial closure for the other two projects.
Valuation & recommendation: On the back of healthy order book and growth
Abs. (%)
3m
1yr
3yr
potential, we believe the company would clock revenue CAGR of 11.5% over
Sensex
5.5
21.6
12.2
FY2012-2014E. The stock is currently trading at a P/E of 3.5x and 3.1x our FY2013
and FY2014 diluted earnings estimates. We have used sum-of-the-parts (SOTP)
Uip
(5.7)
20.0
(60.7)
method to value the stock. We value the construction business at a P/E of 3.5x
FY2014E earnings (~30% discount to larger companies under coverage) and UIP’s
BOT projects on a DCF basis at a CoE of 16%. We initiate coverage on the stock
with a Buy rating and target price of `59, indicating an upside of 27%.
Key Financials (Standalone)
Y/E March (` cr)
FY2011
FY2012
FY2013E
FY2014E
Net Sales
1,702
1,973
2,180
2,455
% chg
15.2
15.9
10.5
12.6
Adj.Net Profit
94
104
99
111
% chg
10.8
9.7
(4.7)
12.4
EBITDA (%)
13.4
13.8
13.7
13.4
FDEPS (`)
12.7
14.0
13.3
15.0
P/E (x)
3.6
3.3
3.5
3.1
P/BV (x)
0.5
0.5
0.4
0.4
RoE (%)
15.5
14.8
12.5
12.5
RoCE (%)
15.1
15.9
15.5
14.9
EV/Sales (x)
0.6
0.5
0.5
0.5
EV/EBITDA (x)
4.5
3.8
3.8
3.6
OB/Sales (x)
2.1
2.1
2.2
2.4
Viral Shah
Order Inflows
1,725
2,676
2,879
3,353
022-39357800 Ext: 6829
% chg
(23.7)
55.1
7.6
16.5
Source: Company, Angel Research
Please refer to important disclosures at the end of this report
1
Unity Infraprojects | Initiating Coverage
Investment Arguments
Comfortable order book-to-sales provides revenue visibility
Comfortable order book-to-sales ratio
UIP has a presence across three verticals namely-(a) civil construction (residential,
of
2.2x trailing revenues, gives
commercial and industrial structure portfolio), (b) water and irrigation and
comfortable visibility for the next two
(c) transportation. UIP has seen its order book swell from `2,410cr in FY2008 to
years’ revenues given the short
~`4,200cr by FY2012 end, indicating a five-year CAGR of 15%. The company’s
execution period of 24-30months.
order book currently stands at ~`4,495cr (excluding L1 orders of ~`1,400cr)
which translate into a book-to-bill ratio of 2.2x trailing revenues. The civil
construction segment contributes 52% and transportation segment contributes 27%
of the total order book. Going forward, we expect the civil and transportation
segments to be the growth drivers for the company.
UIP has a comfortable order book-to-sales ratio of 2.2x trailing revenues, which
gives comfortable visibility for the next two years’ revenues given the short
execution period of 24-30 months. Given the strong bid pipeline and L1 status of
projects worth `1,400cr, we estimate the company would see order inflows of
`2,879cr and `3,353cr in FY2013 and FY2014 respectively. Thus, we expect
the company’s order book to stand at
`4,898cr and `5,798cr in FY2013
and FY2014 respectively with the civil and transportation segment contributing
a major share.
Exhibit 1: Order book trend and OB-to-sales
Exhibit 2: Transportation segment gains momentum
120
7000
2.4
2.4
2.4
2.4
100
6000
2.2
2.3
24
20
21
5000
2.3
80
33
2.1
55
2.2
4000
29
29
2.1
60
14
26
2.2
3000
2.1
40
9
2000
2.1
53
50
51
50
2.0
1000
20
35
2.0
0
1.9
0
FY10
FY11
FY12
FY13E
FY14E
FY10
FY11
FY12
FY13E
FY14E
Order book (` cr)
Order-to-sales ratio (x)
Civil segment
Transportation segment
Irrigation & WS segment
Source: Company, Angel Research
Source: Company, Angel Research
Well diversified order book with pan-India presence
As on 2QFY2013, UIP’s 59.1% of order
UIP initially started off with a presence in Maharashtra and historically remained
book caters to regions (North, South and
skewed towards projects in and around Maharashtra. It has come a long way in
East) apart from the Western region.
the last decade, making its presence felt across India by diversifying into new
verticals and bidding for new projects across the country. As on 30th September
2012, 59.1% of UIP’s order book catered to regions (North, South and East) other
than the Western region.
Over a period, UIP has built a strong and esteemed clientele, especially
comprising government clients. Of the total order book, 87.7% comprises of
government orders while private client orders account for the balance 12.3%. We
believe, strong and timely execution by the company has enabled it to develop a
strong relationship with its clientele which has resulted in it getting repetitive orders
from both - government as well as private clients.
January 10, 2013
2
Unity Infraprojects | Initiating Coverage
Exhibit 3: Order book break up - client wise
Exhibit 4: Diversified order book with pan India presence
Source: Company, Angel Research
Source: Company, Angel Research
Foray into asset ownership model
Moving up the chain by foraying into
From being a mere EPC player, UIP has forayed into the asset ownership model
asset ownership model through its
through its wholly owned subsidiary Unity Infrastructure Assets Ltd and has bagged
wholly
owned subsidiary Unity
3 BOT projects under its portfolio. The company has started construction activity in
Infrastructure Assets Ltd. However, EPC
one of its road BOT project, ie the Chomu-Mahla project and is in an
is going to remain the prime focus for
advanced stage of achieving financial closure for other two projects-(a)
the company.
Suratgarh-Sriganganagar BOT project and (b) Punjab/Haryana border BOT
project. The company expects to achieve financial closure by 4QFY2013, post
which it would start construction activity on the projects.
Exhibit 5: BOT Project details
Project
Chomu-Mahala Punjab Haryana
Suratgarh-Sriganganagar
Type
Toll
Toll
Toll
Status
Under Dev.
FC awaited
FC awaited
km
70
68
76
State
Rajasthan
Punjab/Haryana
Rajasthan
Concession (Yrs)
25
27
11
TPC(` cr)
198
510
330
Equity(` cr)
34
153
93
Debt(` cr)
146
357
231
Grant(` cr)
18
0
5.7
Traffic growth (%)
6%
7%
6%
Toll growth (%)
5%
5%
6%
Interest Rate (%)
12.5%
12.0%
12.0%
Source: Company, Angel Research
Real estate investment to yield value in the long run
UIP made a slow and small foray into the real estate development business
through its wholly owned subsidiary-Unity Realty Developers Ltd for undertaking all
real estate projects. UIP has a total land bank of 40acres in Bangalore and
Kolkata and also has 0.8mn sqft and 2.67mn sqft of developmental land in Goa
and Nagpur respectively. UIP has sold its stake (19%) in the 400 hotel room
project in Pune to Kamat Hotels for `46cr. Out of this amount, the company has
already received `35cr till date; while the remaining `11cr is expected to be
received by February 2013.
January 10, 2013
3
Unity Infraprojects | Initiating Coverage
Exhibit 6: Summary of real estate projects
Projects
Area
Type
Investment in (` cr)
Nagpur
2.67mn sqft
Commercial
36
Goa
0.8mn sqft
Commercial
10
Kolkata
25 acres
Commercial + Residential
60
Bangalore
15 acres
Commercial + Residential
77
Source: Company, Angel Research
UIP made a slow and small foray
After venturing into commercial real estate, the company is planning to develop
into the real estate development
residential real estate in Bangalore and Kolkata. Initially, the management plans to
business through its wholly owned
start construction in Bangalore and then foray into the Kolkata market. The
subsidiary-Unity Realty Developers Ltd
company is planning to launch its Bangalore real estate project towards
for
undertaking all real estate
4QFY2013 end as it is expecting to receive necessary clearances within the next
projects.
two to three months. In phase-I, the company is planning to construct 0.7mn sqft
of commercial cum residential space and expects the realisation from this project
to be in the range of `3,500-4,000 per sqft.
As far as the Nagpur project is concerned, no significant progress has been made
in the last six months. The company has received 3 land parcels till date and is
expecting to receive the remaining land parcels within the next two to three months
from Nagpur Municipal Corporation. Once the entire land parcel is available the
company is expected to start construction activity.
However, owing to significant delay in start of construction activity and in the
absence of clarity on the exact development schedule for all four projects, we have
not assigned any value to the real estate investments.
January 10, 2013
4
Unity Infraprojects | Initiating Coverage
Financial analysis
Strong order book to drive revenue growth
The company’s order book stood at `4,495cr (excluding L1 orders of `1,400cr) in
2QFY2013, thereby converting into order book-to-sales ratio of 2.2x trailing
revenues. This provides comfortable revenue visibility over the next two to three
years. Given the healthy order book, we expect revenues to clock a CAGR of
11.5% over FY2012-FY2014E. Thus, we estimate revenues to increase from
`1,973cr in FY2012 to `2,455cr in FY2014. On the back of recently awarded
BOT projects and shorter execution cycle we believe the civil construction and
transportation segment would contribute the most to UIP’s revenue growth in the
medium term. However, going forward, we expect the water and irrigation
segment to drive revenue growth over a long period.
Exhibit 7: Revenues to clock a CAGR of 11.5% over FY2012-2014E
(` cr)
2,500
647
2,000
539
477
1,500
567
469
412
800
316
1,000
350
119
1184
1172
1240
500
715
783
0
FY10
FY11
FY12
FY13E
FY14E
Civil
Transportation
Irrigation & WS
Source: Company, Angel Research
Margins to sustain at current levels
Historically UIP has enjoyed one of the highest operating margins among its peers.
Going forward, on the back of its current order book mix we believe the company
will sustain EBITDA margins in the range of 13-14% over the next few years. This is
mainly owing to the order book mix; of the total order book, more than 70% is
accounted by the civil and water segments, which enjoy relatively better margins
compared to projects in the road segment. In our view, owing to a high proportion
of revenue coming from the high margin accretive segments, the company would
be able to deliver robust profits.
January 10, 2013
5
Unity Infraprojects | Initiating Coverage
Exhibit 8: Healthy margins to continue
350
14.0
13.4
13.8
13.7
13.8
300
13.6
250
13.4
13.4
200
13.0
13.2
150
13.0
100
12.8
50
12.6
0
12.4
FY10
FY11
FY12
FY13E
FY14E
EBITDA (` cr)
EBITDAM (%)
Source: Company, Angel Research
Earnings growth to be under pressure due to high interest cost
On the bottom-line front, we expect UIP to register earnings of `99cr and `111cr
for FY2013 and FY2014 respectively. The lower earnings are mainly due to a
higher interest expense which continues to remain a concern, with the net interest
at 5.9% of net revenues. For FY2013 and FY2014 we are factoring in an
interest cost of
`147cr and
`157cr respectively. We expect UIP’s debt to
bloat to `1,205cr in FY2014 from `905cr in FY2012 (owing to elongated
working capital cycle).
Exhibit 9: Debt level to increase substantially over FY2012-14E
Exhibit 10: High interest cost dents PAT growth
1,400
8.0
5.8
120
6.0
6.7
5.5
5.2
6.4
4.5
1,200
6.1
7.0
4.5
5.7
100
5.0
6.0
1,000
4.9
5.0
80
4.0
800
4.0
60
3.0
600
3.0
40
2.0
400
2.0
147
157
121
20
1.0
200
84
83
1.0
0
0.0
0
0.0
FY10
FY11
FY12
FY13E
FY14E
FY10
FY11
FY12
FY13E
FY14E
Debt (` cr)
Int. cost (` cr)
Int. as % sales
PAT (` cr)
PATM (%)
Source: Company, Angel Research
Source: Company, Angel Research
January 10, 2013
6
Unity Infraprojects | Initiating Coverage
Equity requirement to the tune of ~`175cr
The company has a total equity requirement to the tune of `225cr for its three BOT
projects. It has already invested ~`50cr-60cr in under-development BOT portfolio
till 1HFY2013 and would require an incremental equity investment of ~`175cr
over the next two to three years. According to the management, the company is
looking to dilute 14% stake in its wholly owned subsidiary Unity Infrastructure
Assets Ltd and is in an advanced stage of negotiation with some PE investors for
raising
`175cr. We believe this would help the company fund its equity
requirements.
Peer comparison
UIP is a dominant player with more than a decade of experience in civil
construction and infrastructure development space and has a unique business
model. Therefore identical comparison with other players in this segment is not
possible. However, we have considered other companies that are present in the
construction business and bid for similar projects. From the table below, it can be
referred that UIP has decent return ratios and enjoys higher margins as compared
to other companies.
Exhibit 11: Relative valuation table
EBITDA
PAT
Mcap
P/E
P/BV
P/Sales
EV/EBITDA
EV/Sales
RoE (%)
Margin (%)
Margin (%)
(` cr) FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY14E
Simplex Infra
1,121
9.8
7.2
0.9
0.8
0.2
0.1
7.7
5.0
0.7
0.5
9.1
9.1
1.7
1.9
11.2
Unity Infra
342
3.5
3.1
0.4
0.4
0.2
0.1
5.5
3.6
0.7
0.5
13.7
13.4
4.5
4.5
12.5
J. Kumar Infra
640
8.0
6.5
1.2
1.0
0.6
0.5
4.1
3.4
0.6
0.5
15.4
15.4
6.8
6.9
17.1
JMC Projects
301
12.4
9.9
0.7
0.7
0.1
0.1
5.0
4.0
0.3
0.2
5.2
6.1
1.0
1.2
6.7
Pratibha Ind
556
5.8
4.3
0.9
0.7
0.3
0.2
4.9
4.2
0.7
0.6
13.7
13.7
4.6
4.8
18.4
Source: Company, Angel Research Note: *Figures are Bloomberg estimates; CMP is as on 10th January 2013.
January 10, 2013
7
Unity Infraprojects | Initiating Coverage
Valuation and Outlook
On the back of a healthy order book and growth potential, we expect the company
to clock a revenue CAGR of 11.5% over FY2012-2014. Going forward, we believe
the company would sustain EBITDA margins in the range of 13-14% over the next
few years, based on the current order book mix. Due to this, we expect the diluted
earnings per share to improve from `14 in FY2012 to `15 in FY2014, indicating a
CAGR of 3.5%.
The stock is currently trading at a P/E of 3.5x and 3.1x our FY2013 and FY2014
diluted earnings estimates. We have used SOTP method to value the stock. We
value the construction business at a P/E of 3.5x FY2014 earnings estimate (~30%
discount to larger companies under coverage) and UIP’s BOT projects on a DCF
basis at a CoE of 16%. However, we have not assigned any value to the real estate
investments owing to significant delay in start of construction activity and in the
absence of clarity on the exact development schedule for all (four) of its projects.
We initiate coverage on the stock with a Buy rating and target price of `59,
indicating an upside of 27%.
Exhibit 12: P/E Band
160
140
120
100
80
60
40
20
0
Nov-08
Sep-09
Jul-10
May-11
Mar-12
Jan-13
2.5x
5x
7.5x
10x
Source: Company, Angel Research
Exhibit 13: Angel EPS forecast vs consensus
Angel forecast
Bloomberg consensus
Variation (%)
FY2013E
13.3
12.7
4.8
FY2014E
15.0
15.0
(0.1)
Source: Company, Angel Research
January 10, 2013
8
Unity Infraprojects | Initiating Coverage
Concerns
Execution risk
Any delay in under construction BOT
Execution risk could be for various reasons such as delay in land acquisition by
projects would adversely impact our
NHAI/state and thus the delay in providing Right of Way, and delay in clearances
NPV valuations.
from authorities such as environment, forest and railways etc in the road sector.
Such delay has a greater impact in a BOT project as compared to an EPC project.
Hence, any delay in under construction BOT projects would adversely impact our
NPV valuations.
Slowdown in award of new projects
Order inflow acts as a catalyst for EPC
The company’s order book mainly comprises of orders from the Western (40.9%)
arm; any slowdown in awarding of
and Northern (45.1%) regions. Therefore, any slowdown in award of projects from
projects would negatively impact the
the government or/and private client would negatively impact the company’s
company’s performance.
performance.
Interest rate risks
Any hike in the interest rates could
The inherent nature of the EPC business requires high working capital cycle. As on
increase its interest costs.
2QFY2013, the company has a high interest expense at 9.8% of revenues. Going
forward, any hike in the interest rates could increase the company’s interest costs
and affect its earnings growth.
Commodity risks
All EPC players are facing pressures from the recent price inflation in commodities
such as aggregates, cement, sand, bitumen and steel, which directly affect
margins. However, the company has mitigated risk as most of the company’s
order book has a price escalation clause.
High working capital cycle
Most infrastructure companies are witnessing high working capital cycles, high
interest rates and stretched balance sheets. However, as compared to its peers, UIP
has an even higher net working capital cycle (220 days in FY2012). This is mainly
due to high government orders which make for 87.7% of the total order book.
Exhibit 14: High working capital cycle
Net working Capital cycle (days)
300
268
250
220
190
200
150
125
91
100
63
50
50
0
NCC Sadbhav
L&T
Unity Infra Pratibha
J kumar
IVRCL
Ind.
FY10
FY11
FY12
Source: Company, Angel Research
January 10, 2013
9
Unity Infraprojects | Initiating Coverage
Company background
Unity Infraprojects Ltd (UIP) is a mid-size engineering and construction company
with focus on civil construction and infrastructure development in India. The
company is the flagship unit of the Mumbai based KK Group of Companies. The
company is focused in areas, such as civil construction and infrastructure
development projects. The company has three subsidiaries, namely Unity Realty
and Developers Ltd, Unity Infrastructure Assets Ltd and Unity Telecom Ltd. UIP was
incorporated as Unity Builders Ltd on April 9, 1997. The company changed its
name to Unity Infraprojects Ltd on January 14, 2000. The company has gained
credibility owing to its quick turnaround time, in-time and within-cost deliveries,
organizational strength and financial stability and above all, international
standards.
Exhibit 15: Company Structure
Source: Company, Angel Research
January 10, 2013
10
Unity Infraprojects | Initiating Coverage
Annexure - I
Exhibit 16: Key projects under execution as on November 2012
Particulars
(` cr)
Civil Construction segment
Redevelopment of Lady Hardinge Hospital, New Delhi
414
Director General of the Married Accommodation Project, Delhi
299
Redevelopment of R.N. Cooper Hospital at Vile Parle, Mumbai
265
Shantigram Township, Ahmedabad
184
Construction of Assam Hills Medical College & Research Institute, Assam
157
Prison Complex i/c housing at Mandoli, New Delhi
154
Township Project for Rail Coach Factory, Raebareli, Uttar Pradesh
145
Construction of Chemical Laboratory Building, Delhi University, Delhi
122
Construction of NIFT Campus at Kharghar, Navi Mumbai
103
Construction of Indian High Commission Complex, Dhaka, Bangladesh
100
Township for DAE - Anushakti Nagar, Mumbai
97
Transportation segment
Construction of 4 -laning of Punjab/ Haryana Border - Jind Section of NH- 71 (DBFOT)
510
Widening & up gradation Mardha Village to Antela Village in Rajasthan
340
Construction of Suratgarh- Sriganganagar Section of NH-15 (DBFOT)
310
Chomu Mahla Road Project (DBFOT)
198
Irrigation & Water Supply segment
Supply, Installation & Maintenance of AMR Water meters - Mumbai
633
Construction of long tunnel from Kapurbawadi to Bhandup Complex, Mumbai
573
Replacement of existing riveted Tansa Mains from Tansa to Tarali - Thane District
325
Diversion of Water Mains by Micro-tunneling in Eastern & Western Suburbs, Mumbai
88
Source: Company, Angel Research
January 10, 2013
11
Unity Infraprojects | Initiating Coverage
Profit and Loss (Standalone)
Y/E March (` cr)
FY2009
FY2010
FY2011
FY2012
FY2013E
FY2014E
Net Sales
1,131
1,477
1,702
1,973
2,180
2,455
Other operating income
-
-
-
-
-
-
Total operating income
1,131
1,477
1,702
1,973
2,180
2,455
% chg
33.1
30.6
15.2
15.9
10.5
12.6
Total Expenditure
988
1,285
1,474
1,701
1,882
2,126
R.M. consumed
473
581
825
964
1,003
1,127
Construction expenses
445
613
505
575
693
781
Employee expenses
43
53
59
61
77
96
SG&A
26
38
85
101
109
123
EBITDA
143
191
227
272
298
329
% chg
34.4
34.0
18.8
19.7
9.7
10.2
(% of Net Sales)
12.6
13.0
13.4
13.8
13.7
13.4
Depreciation & Amortisation
16
17
18
20
23
28
EBIT
127
174
209
252
275
301
% chg
28.3
37.0
20.3
20.4
9.1
9.4
(% of Net Sales)
11.2
11.8
12.3
12.8
12.6
12.2
Interest & other Charges
58
84
83
121
147
157
Other Income
35
40
17
20
20
22
(% of PBT)
34.0
30.8
12.1
13.3
13.3
13.4
Share in profit of Asso.
-
-
-
-
-
-
Recurring PBT
104
130
143
150
147
165
% chg
14.1
25.0
10.3
5.0
(2.2)
12.4
Extraordinary Expense/(Inc.)
-
-
-
-
-
-
PBT (reported)
104
130
143
150
147
165
Tax
34.3
44.7
48.9
46.9
48.6
54.6
(% of PBT)
33.0
34.4
34.1
31.2
33.0
33.0
PAT (reported)
70
85
94
104
99
111
Add: Share of earnings of asso
-
-
-
-
-
-
Less: Minority interest (MI)
-
-
-
-
-
-
Prior period items
-
-
-
-
-
-
PAT after MI (reported)
70
85
94
104
99
111
ADJ. PAT
70
85
94
104
99
111
% chg
16.0
22.2
10.8
9.7
(4.7)
12.4
(% of Net Sales)
6.2
5.8
5.5
5.2
4.5
4.5
Basic EPS (`)
9.4
11.5
12.7
14.0
13.3
15.0
Fully Diluted EPS (`)
9.4
11.5
12.7
14.0
13.3
15.0
% chg
16.0
22.2
10.8
9.7
(4.7)
12.4
January 10, 2013
12
Unity Infraprojects | Initiating Coverage
Balance Sheet (Standalone)
Y/E March (` cr)
FY2009
FY2010
FY2011
FY2012
FY2013E
FY2014E
SOURCES OF FUNDS
Equity Share Capital
13
15
15
15
15
15
Share App Money - warrants
-
-
-
-
-
-
Reserves & Surplus
405
550
636
731
820
921
Shareholders Funds
418
565
651
746
835
936
Minority Interest
-
-
-
-
-
-
Total Loans
472
686
861
905
1,055
1,205
Deferred Tax Liability
2
1
1
(2)
(2)
(2)
Total Liabilities
892
1,253
1,513
1,650
1,889
2,139
APPLICATION OF FUNDS
Gross Block
144
154
186
222
282
342
Less: Acc. Depreciation
36
53
70
90
114
142
Net Block
107
100
116
132
168
200
Capital Work-in-Progress
-
1
11
-
-
-
Goodwill
-
-
-
-
-
-
Investments
34
34
68
54
104
179
Current Assets
1,247
1,465
1,762
1,956
2,171
2,379
Inventories
110
133
78
200
232
256
Sundry Debtors
410
562
807
890
944
1,009
Cash
111
161
189
218
278
354
Loans & Advances
615
609
680
642
710
754
Other
-
-
7
7
7
7
Current liabilities
496
347
444
493
555
620
Net Current Assets
751
1,118
1,318
1,463
1,616
1,760
Mis. Exp. not written off
-
-
-
-
-
-
Total Assets
892
1,253
1,513
1,650
1,889
2,139
January 10, 2013
13
Unity Infraprojects | Initiating Coverage
Cash Flow (Standalone)
Y/E March (` cr)
FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E
Profit before tax
104
130
143
150
147
165
Depreciation
16
17
17
20
23
28
Change in Working Capital
(210)
(317)
(172)
(117)
(92)
(68)
Less: Other income
(35)
(40)
(17)
(20)
(20)
(22)
Direct taxes paid
(34)
(45)
(49)
(47)
(49)
(55)
Cash Flow from Operations
(160)
(255)
(78)
(13)
10
49
(Inc.)/ Dec. in Fixed Assets
(66)
(11)
(43)
(25)
(60)
(60)
(Inc.)/ Dec. in Investments
10
(0)
(34)
14
(50)
(75)
Other income
35
40
17
20
20
22
Cash Flow from Investing
(20)
29
(59)
9
(90)
(113)
Issue of Equity
-
1
-
-
-
-
Inc./(Dec.) in loans
193
214
174
45
150
150
Dividend Paid (Incl. Tax)
(7)
(9)
(9)
(9)
(9)
(10)
Others
1
69
(0)
(3)
0
(0)
Cash Flow from Financing
186
276
165
33
141
140
Inc./(Dec.) in Cash
6
50
28
29
61
75
Opening Cash balances
105
111
161
189
218
278
Closing Cash balances
111
161
189
218
278
354
January 10, 2013
14
Unity Infraprojects | Initiating Coverage
Key Ratios
Y/E March
FY2009
FY2010
FY2011
FY2012
FY2013E
FY2014E
Valuation Ratio (x)
P/E (on FDEPS)
4.9
4.0
3.6
3.3
3.5
3.1
P/CEPS
4.0
3.3
3.0
2.8
2.8
2.5
P/BV
0.8
0.6
0.5
0.5
0.4
0.4
Dividend yield (%)
1.8
2.2
2.2
2.2
2.4
2.6
EV/Sales
0.6
0.6
0.6
0.5
0.5
0.5
EV/EBITDA
4.9
4.5
4.5
3.8
3.8
3.6
EV / Total Assets
0.8
0.7
0.7
0.6
0.6
0.6
Per Share Data (`)
EPS (Basic)
9.4
11.5
12.7
14.0
13.3
15.0
EPS (fully diluted)
9.4
11.5
12.7
14.0
13.3
15.0
Cash EPS
11.5
13.8
15.2
16.7
16.5
18.8
DPS
0.8
1.0
1.0
1.0
1.1
1.2
Book Value
56.5
76.3
87.9
100.7
112.7
126.3
Dupont Analysis
EBIT margin
11.2
11.8
12.3
12.8
12.6
12.2
Tax retention ratio
67.0
65.6
65.9
68.8
67.0
67.0
Asset turnover (x)
1.7
1.6
1.4
1.4
1.4
1.4
ROIC (Post-tax)
13.0
12.2
11.4
12.6
12.1
11.9
Cost of Debt (Post Tax)
10.4
9.5
7.1
9.5
10.1
9.3
Leverage (x)
0.7
0.9
1.0
1.0
0.9
0.9
Operating ROE
14.7
14.6
15.6
15.6
14.0
14.2
Returns (%)
ROCE (Pre-tax)
16.6
16.2
15.1
15.9
15.5
14.9
Angel ROIC (Pre-tax)
19.3
18.6
17.4
18.4
18.1
17.7
ROE
18.0
17.3
15.5
14.8
12.5
12.5
Turnover ratios (x)
Asset Turnover (Gross Block)
10.2
9.9
10.0
9.7
8.6
7.9
Inventory / Sales (days)
24
30
23
26
36
36
Receivables (days)
123
120
147
157
153
145
Payables (days)
156
120
98
100
102
101
Wcap cycle (ex-cash) (days)
173
197
224
220
216
204
Solvency ratios (x)
Net debt to equity
0.9
0.9
1.0
0.9
0.9
0.9
Net debt to EBITDA
2.5
2.7
3.0
2.5
2.6
2.6
Interest Coverage
2.2
2.1
2.5
2.1
1.9
1.9
January 10, 2013
15
Unity Infraprojects | Initiating Coverage
Research Team Tel: 022 - 39357800
DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,
nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While
Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,
compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or
other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in
the past.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please
refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and
its affiliates may have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement
Unity Infraprojects
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns):
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
Reduce (-5% to -15%)
Sell (< -15%)
January 10, 2013
16
Unity Infraprojects | Initiating Coverage
6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai- 400 093. Tel: (022) 39357800
Research Team
Fundamental:
Sarabjit Kour Nangra
VP-Research, Pharmaceutical
Vaibhav Agrawal
VP-Research, Banking
Bhavesh Chauhan
Sr. Analyst (Metals & Mining)
Viral Shah
Sr. Analyst (Infrastructure)
Sharan Lillaney
Analyst (Mid-cap)
V Srinivasan
Analyst (Cement, FMCG)
Yaresh Kothari
Analyst (Automobile)
Ankita Somani
Analyst (IT, Telecom)
Sourabh Taparia
Analyst (Banking)
Bhupali Gursale
Economist
Vinay Rachh
Research Associate
Amit Patil
Research Associate
Shareen Batatawala
Research Associate
Twinkle Gosar
Research Associate
Tejashwini Kumari
Research Associate
Technicals:
Shardul Kulkarni
Sr. Technical Analyst
Sameet Chavan
Technical Analyst
Sacchitanand Uttekar
Technical Analyst
Derivatives:
Siddarth Bhamre
Head - Derivatives
Institutional Sales Team:
Mayuresh Joshi
VP - Institutional Sales
Hiten Sampat
Sr. A.V.P- Institution sales
Meenakshi Chavan
Dealer
Gaurang Tisani
Dealer
Akshay Shah
Sr. Executive
Production Team:
Tejas Vahalia
Research Editor
Dilip Patel
Production
Angel Broking Ltd: BSE Sebi Regn No : INB 010996539 / CDSL Regn No: IN - DP - CDSL - 234 - 2004 / PMS Regn Code: PM/INP000001546 Angel Securities Ltd:BSE: INB010994639/INF010994639 NSE: INB230994635/INF230994635 Membership numbers: BSE 028/NSE:09946
Angel Capital & Debt Market Ltd: INB 231279838 / NSE FNO: INF 231279838 / NSE Member code -12798 Angel Commodities Broking (P) Ltd: MCX Member ID: 12685 / FMC Regn No: MCX / TCM / CORP / 0037 NCDEX : Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302
January 10, 2013
17
