«
»

OM METALS INFRAPROJECTS – SBICAP Securities Tips

OM METALS INFRAPROJECTS
Reco price: Rs 30
Target price: Rs 39
Upside: 23.8%
Brokerage: SBICAP Securities

Om Metals Infraprojects is the largest hydro-mechanical equipment supplier in India with a market share of over 60 per cent. The company presently has an order book of Rs 636 crore, which is 3.5 times first half 2009-10 annualised sales and is expected to be completed in next 3 years. This provides substantial medium-term revenue visibility. In addition, the company has submitted bids for more projects, which are expected to take the total order book to over Rs 800 crore by 2009-10.

The company has recently forayed into the infrastructure segment by winning two contracts for the development of a port and a multi-product SEZ, both in Pondicherry. The SEZ project is spread over 860 acres and the company has a 20 per cent stake in it. It has a 50 per cent stake in the port project, which is to be developed in next 5-6 years. Both projects are expected to be developed through separate SPV’s.

Further, there is potential to unlock value from its saleable land-bank (1.5 MSF) situated at Hyderabad, Jaipur, Mumbai, Faridabad and Kota. The stock is trading at 5.3 times its core 2010-11 estimated earnings. Maintain ‘buy’.

This entry was posted on Monday, January 4th, 2010 at 5:54 pm and is filed under Stocks To Watch. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply