JMC delivered robust standalone 1QFY20 performance though Rs 140mn BOT loss funding was dampener. Order book accretion of Rs 11.3bn is strong, largely driven by B&F segment. We expect JMC to clock 15.9% revenue CAGR over FY19-21E. High tax rate and interest cost to result in 4.6% muted EPS CAGR. The stock currently trades at 13.7/12.6x FY20/21E Core EPC earnings. We will closely monitor the progress on BOT assets monetization and performance in 2QFY20. Key risks (1) BOT Loss funding (2) High debt (3) Real estate slowdown.We maintain BUY on JMC, with a TP of Rs 176/sh (vs Rs173/sh earlier). During 1QFY20 JMC delivered Rev/EBIDTA/APAT beat of 20/27/18% vs our estimates. We value EPC business at 16x Mar-21 EPS.
With real estate segment being subdued since last couple of years, the company has increased its focus on Infrastructure segment and it now forms ~35% of the current CMP (Rs) 120 12‐mts Target (Rs) 140Stock data (As on Jul 30, 2019) Upside 17% orderbook. The company’s empasison infrastructure business to continue BSEcode: 522263Promoter 67.2% in FY20 with order inflow target of ~Rs.25bn from the segment (total inflow target of ~Rs.60bn during FY20). Going forward, with strong order book position and robust execution capabilities, we expect company to post 16% revenue CAGR over FY19-21E. Operating margin is likely to remain at an elevated level of ~11%. We maintain our BUY rating on the stock for target price of Rs.140 (based on SOTP valuation).