Scripscan:Prakash Constrowell Ltd
cmp:108
Code:533605
Story:The company executes construction contracts in infrastructure (roads, bridges and industrial parks which constitutes 52 per cent of order book), civil construction (government staff quarters and hostels, 45.5 per cent of order book) and residential buildings (2.7 per cent of order book), affording it a degree of segment diversification. Concentration of orders in terms of geography and client-base, however, detracts from a wider segment presence. All contracts executed thus far as well as the current order book are located in Maharashtra. Further, the company relies on public sector orders, with over half the revenues in the past three years stemming from two clients in this space. While it does have an established relationship with the clients which results in repeat orders, scaling up requires the company to move to other regions. Given that states would have forged similar relationships with other construction companies, geographic diversification with the company's existing areas of operation may be an uphill task.The company may also not be able to procure bigger orders easily, given its small size of operations and limited range of projects executed, which restrict bidding qualification for projects. Its current order book stands at just Rs 150 crore (1.2 times FY-11 revenues) with the average order size a mere Rs 5 crore. Though it plans to partner other companies to boost qualification, it has not in the past undertaken any such joint ventures.Revenues have clocked a three-year compounded annual growth of 68 per cent, while net profits have grown 49 per cent in the same period. The company owns part of its own equipment; operating margins were strong at 15 per cent in FY-11 and net margins stood at 8 per cent.A wait and watch candidate as of now.
Friday, April 6, 2012
Important Disclaimer&Privacy policy
This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com
Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
