PSP Projects Q3 Results Review - Poor Quarter; Execution To Pick Up From Q4: Dolat Capital
PSP Projects reported result much below estimates except Ebitda margin inline.
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Dolat Capital Report
PSP Projects Ltd. reported result much below estimates except Ebitda margin inline. The company posted marginal growth of 2.4% YoY in revenue to Rs 5.0 billion, whereas Ebitda/adjusted profit after tax were down by 16.8%/ 24.8% YoY to Rs 616 million/ Rs 353 million in Q3 FY23.
Ebitda margin down 286 basis points YoY to 12.4% primarily due to higher construction expenses and other expenses, which was partially offset by lower raw material cost and employee cost.
PSP Projects won orders worth Rs 18 billion/ Rs 36.4 billion (including level one of Rs 3.5 billion) in FY22/ year-to-date FY23. The current order book of Rs 64.2 billion (Rs 50.8 billion as on Dec-22) provides revenue visibility for 3.7 times trailing twelve months revenue.
PSP Projects has bid pipeline of Rs 45 billion of which 60%/ 25% is from private projects/ Gujarat. We factor our order inflow estimates of Rs 37.9 billion (versus earlier Rs 25 billion)/ Rs 35 billion (versus earlier Rs 30 billion)/ Rs 40 billion (versus earlier Rs 30 billion) for FY23E/ FY24E/ FY25E.
We decrease our revenue/ Ebitda/adjusted profit after tax estimates by 7.9%/ 6.6%/ 11.1% for FY23E factoring nine months-FY23 numbers. However, we maintain our estimates for FY24E, whereas we increase our revenue/ Ebitda/adjusted profit after tax estimates by 9.6%/ 9.6%/ 8.4% for FY25E factoring higher order inflow in FY23E/ FY24E.
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