Investor Briefing

PRATIBHA INDUSTRIES

SHARETIPSINFO.COM

contact@sharetipsinfo.com

Oct. 11

SECTOR: Construction

Sensex: 26297.38

CMP (Rs): 50.70

Target price

(Rs):

62

52 Week h/l (Rs): 66.70/21.05

Month h/l (Rs): 63.90/46.55

Market cap ( cr): 512.35

Avg volume(bse) 29312

FV (Re): 2

P/E 11.99

EPS 4.24

BSE code: 532718

NSE code: PRATIBHA

Prices as on 11 Oct, 2014

Shareholding pattern

Sep ‘14 (%)

Promoters 46.9

Institutions 16.8

Public & others 36.3

Performance rel. to sensex

(%) Opm

%

Npm

%

EPS

PRATIBHA 14.06 2.12 1.11

LT 16.90 8.64 9.63

IL&SENGG 6.39 -6.82 -4.69

PATELENG 25.89 0.14 0.09

COMPANY OVERVIEW:

Pratibha Industries Limited is engaged in designing, engineering

and execution/construction of complex and integrated water

transmission and distribution projects. It was established in

1982 in Maharashtra. The Company operates in two segments:

Infrastructure & Construction, and Manufacturing and

Coating. It also manufactures helical SAW pipes for various

applications, such as oil and gas transmission mains; low and

medium pressure city gas mains; water supply transmission

mains and distribution pipelines; steam, gas, and other piping

requirements in chemical plants/petroleum refineries; and

pilling, casing, mining, and dredging steel pipes for structural

purposes.

The Company’s subsidiaries include Muktangan Developers

Pvt. Ltd., Pratibha Infrastructure Pvt Ltd, Prime Infrapark Pvt.

Ltd, Bhopal Sanchi Highways Private Limited, Pratibha Heavy

Engineering Ltd, Pratibha Holding (Singapore) Pte Ltd,

Pratibha Infra Lanka (Private) Ltd and Pratibha Developers

Pvt. Ltd. The Company is a main company of the Pratibha

Group.

SECTOR OUTLOOK:

Infrastructure sector is broadly classified into residential, retail &

commercial. This sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross

domestic product. Almost five per cent of the country’s GDP is

contributed to by the housing sector & Infra sector. Almost 80 per cent of real estate developed in India is residential space, the rest

comprising of offices, shopping malls, hotels and hospitals.

Government has announced plans for various infrastructure developments across the country including two major ports, three

airports, nearly 6000 miles of new road projects, 100 new smart

cities and an elevated rail corridor and diamond corridor, bullet train

projects etc. The key rate cuts or hike by Reserve Bank of India does impact the

real estate companies as housing loans are directly correlated to the

changes in rate made by RBI.

PRATIBHA INDUSTRIES

SHARETIPSINFO.COM

contact@sharetipsinfo.com

RESULT PERFORMANCE HIGHLIGHTS:

The company operates as an infrastructure company in India and internationally has reported its financial

results for the quarter ended 30 JUNE, 2014. The company’s net profit jumps to Rs. 110.33 million against Rs.

1.64 million in the corresponding quarter ending of previous year. Revenue for the quarter rose by 25.27% to Rs. 6968.92 million from Rs. 5563.13 million, when compared with the prior year period. Reported earnings

per share of the company stood at Rs. 1.09 a share during the quarter as against Rs. 0.02 over previous year

period. Profit before interest, depreciation and tax is Rs. 1035.14 million as against Rs. 803.09 million in the

corresponding period of the previous year.

HIGHLIGHTS THE FACT: --Pratibha Industies Ltd established in Maharashtra and operates an infrastructure company in India

and internationally. At present real sector outlook is positive for uptrend side.

-- The company’s net sales registered 25.27% increased and stood at Rs. 6968.92 million from

Rs.5563.13 million over the corresponding quarter of previous year.

-The company has Rs 8130.00 million worth of orders on hand whisch are executable in the next year.

--Net profit jumps to 110.33 million as against Rs 1.64 million in the corresponding quarter of previous

year.

--The company has reported an EPS of Rs 1.09 for the 1st quarter as against an EPS of Rs. 0.02 in the

corresponding quarter of the previous year.

--Net Sales and OPM of the company are expected to grow at a CAGR of 13% and 15% over 2013 to

2016E respectively.

--Revenues of Infrastructure & Construction segment increased by 20% Rs 6678.96 million in Q1FY15

as compared to Rs.5557.41 million in Q1 FY14.

TECHNICALLY VIEW:

The stock is currently close above 50 and 100 days moving average that is good bullish signal on

daily base. RSI & MFI is present at 70 and 68.76 respectivally, which is sideways for the support

come around 45. The stock is currently consolidated in the past weeks as major support is found

48-45 levels. ADX is above 20 showing uptrend signal on the daily base. Hence Entry would be

above 51 for the target would seen in the near term is 62.

VALUATION & OUTLOOK:

Earnings per share (EPS) of the company for the

earnings for FY15E and FY16E are seen at Rs. 4.01

and Rs. 4.83 respectively. Price to Book value of the

stock is expected to be at 0.76x and 0.71x

respectively for FY15E and FY 16E.

Net Sales and Operating Profit of the company are

expected to grow at a CAGR of 13% and 15% over

2013 to 2016E respectively.

CONCLUSION:

At the current market price of Rs. 50.70, the

stock P/E ratio is at 11.99 x FY15E and 10.45 x

FY16E respectively. And on the basis of

EBITDA, the stock trades EPS of 4.2x for

FY15E and estimates 5.2x for FY16E.

In view of this, we retain our Buy recommend in

this script with a objective price of Rs 62 in

short term outlook.