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Capacit'e Infraprojects IPO: HEM Securities recommend to 'Subscribe' -
Capacit'e Infraprojects IPO: HEM Securities recommend to 'Subscribe'
Hem Securities | Published: 11 Sep, 2017  | Source :

Co is a fast growing construction company focussed on Resi-dential, Commercial and Institutional buildings. It provide end-to-end construction services for residential buildings (“Resi-dential”), multi level car parks, corporate office buildings and buildings for commercial purposes (collectively, “Commercial”) and buildings for educational, hospitality and healthcare pur-poses (“Institutional”). Co’s capabilities include constructing concrete building structures as well as composite steel struc-tures. Co also provide mechanical, electrical and plumbing (“MEP”) and finishing works. Co predominantly operate in the Mumbai metropolitan region (“MMR”), the National Capital Region (“NCR”) and Bengaluru. Co’s operations are geograph-ically divided into MMR and Pune (“West Zone”), NCR and Pat-na (“North Zone”) and Bengaluru, Chennai, Hyderabad, Kochi and Vijaywada (“South Zone”).Co intends to raise funds for funding working capital requirements worth of Rs 250 Cr & purchase of capital assets (system formwork) worth of Rs 51.95 Cr.

Investment Rationale

Co work for a number of reputed clients and are associated with some marquee construction projects in India. Some of co’s clients include Kalpataru, Oberoi Constructions Limited, The Wadhwa Group, Saifee Burhani Upliftment Trust, Lodha Group, Rustomjee, Godrej Properties Limited, Brigade Enterprises Limited and Prestige Estates Projects Limited. As of May 31, 2017, co have an order book aggregating to Rs 46024.76 mil-lion, with projects spread across major regions in India. Co’s Order Book, as at May 31, 2017, is 3.98 times the consolidated revenue from operations for the financial year ended March 31, 2016 and consisted of orders for construction of 12 Super High Rise Buildings, 23 High Rise Buildings, 6 Other Buildings, 14 Gated Communities and 1 Villament. Further, co’s ongoing exe-cution of certain redevelopment projects, such as the Saifee Burhani Upliftment Project – Sub cluster 03 and Rustomjee Seasons, will allow co to qualify for and to bid for mass housing projects in the future. As of May 31, 2017, co had 1,711 em-ployees and 10,035 contract labourers across all its projects.


Co is bringing the issue at price band of Rs 245-250/share on post issue FY17 eps at p/e multiple of approx. 24.37 . Co’s large order book of Rs 46024.76 million gives strong reve-nue visibility. Also co has posted phenomenal growth in its financials with more than 70% CAGR from FY14 to FY17 in its topline & bottomline, thus making issue attractive one to deploy the funds in. Hence we recommend "Subscribe" on issue.

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