Company Overview:
Afcons Infrastructure Ltd. (AIL) is a flagship infrastructure, engineering and construction company of Shapoorji Pallonji group. The company specialises into execution of challenging, complex and unique Engineering, Procurement and Construction (EPC) projects both in domestic and international markets.
Key Highlights:
Successful track record with international presence: The company, in the last 11 years, has executed 79 projects across 17 countries with a total executed contract value of Rs 56,305 cr. Over the years, it has expanded its presence globally and in particular across Asia, Africa and the Middle East. The areas of operations cover 5 major infrastructure business verticals viz Marine and Industrial, Surface Transport, Urban Infrastructure, Hydro and Underground and Oil and Gas.
AIL is the 10th largest international marine and port facilities contractor. It is also 12th largest contractor in the bridges segment, 42nd largest contractor in the transportation segment and the 18th largest contractor in the transmission lines and aqueducts segment globally (based on International Revenue for the Financial Year 2023).
Strong order book: The company currently is executing 65 projects across 12 countries with an aggregate order book of Rs 31,747 cr as of Jun’24. The order book to sales ratio stood at 2.52x thus offers decent revenue visibility in near term. Subsequent to Jun’24, the company won new orders worth Rs 5,936.7 cr till Sep’24 and is currently L1 for orders worth Rs 10,732.4 cr. The order book is diversified across vertical and geographies (refer page 289 and 290 of RHP).
Strategic equipment base leading to strong execution capabilities: The company maintains strategic equipment base comprising a wide range of heavy machinery and specialized equipment which enables company in timely execution of projects at the same time instrumental in winning several complex projects. As of Jun’24, the equipment base included 11 marine barges, 153 cranes, 16 tunnel boring machines, 8 large capacity jack ups, and 21 piling rigs (refer page 291 of RHP).
Experienced leadership team with Shapoorji Pallonji group parentage: Shapoorji Pallonji Group is a leading conglomerate in India operating for over 150 years in the construction industry. With a long-standing history and strong brand recognition, the clients perceive the group as a symbol of excellence, trustworthiness, and timely project delivery. The company leverage its construction industry expertise and reputation to drive business development.
Valuation:
The company, at lower and upper price band of Rs 440 and Rs 463, is valued at a P/E multiple of 36.1x/37.9x of its FY24 consolidated earnings respectively based on post issue capital. The company has demonstrated healthy financial performance as Revenue/EBITDA/PAT grew at 9.7%/20.8%/12.1% CAGR between FY22-FY24 to Rs 13,267.5 cr/ Rs 1,365.0 cr/ Rs 449.7 cr respectively.
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