Q3 FY21 Result Update - PSP Projects - YES Securities

(Rating: BUY, Target: Rs 528, Upside: 29.1%)

- Reported topline de-growth of 8% yoy (to Rs.3.90 bn) on standalone basis which was largely in line with our estimate of Rs.3.98 bn. The execution improved drastically over Q2 with better labor availability and impact of monsoon largely behind.

- Operating margin stood at 12.0% during Q3 FY21 (10.1% in Q2 FY21). The margins were in line with our estimates and improved over qoq basis with execution picking up.

Our View: While the execution has picked up well on expected lines, order inflows have been below par. However the bid pipeline is strong and orders are expected to flow through in coming months. Going forward, the execution momentum is expected to continue with SDB execution moving up and new projects like Bhiwandi and Sabha Hall start their contribution to revenues. Operating margin is expected to remain healthy at ~13% levels. We roll forward our estimates to FY23 and maintain our BUY rating on the stock for target price of Rs.528.

Shares of PSP Projects Ltd was last trading in BSE at Rs.409 as compared to the previous close of Rs. 419.55. The total number of shares traded during the day was 43245 in over 1039 trades.

The stock hit an intraday high of Rs. 429 and intraday low of 401. The net turnover during the day was Rs. 17983239.

Source : Equity Bulls

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