Add PSP Projects, target price Rs 764: HDFC Securities

HDFC Securities has add call on PSP Projects with a target price of Rs 764. The current market price of PSP Projects is Rs 682.85.

PSP Projects, incorporated in the year 2008, is a Small Cap company (having a market cap of Rs 2465.82 Crore) operating in Construction sector.

PSP Projects key Products/Revenue Segments include Contract Revenue and Other Operating Revenue for the year ending 31-Mar-2021.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 506.59 Crore, up 38.31 % from last quarter Total Income of Rs 366.27 Crore and up 2.41 % from last year same quarter Total Income of Rs 494.69 Crore. Company has reported net profit after tax of Rs 35.33 Crore in latest quarter.

The company’s top management includes Mr.Prahaladbhai S Patel, Ms.Pooja P Patel, Mr.Sagar P Patel, Mr.Achala Monal Patel, Mr.Vasishtha P Patel, Mr.Sandeep H Shah. Company has Kantilal Patel & Co. as its auditors. As on 30-09-2022, the company has a total of 4 Crore shares outstanding.

Investment Rationale
Given a robust order book and likely higher execution in the near term, the brokerage recalibrates its FY24/25 EPS higher and increases its target price to Rs 764/share (13x Dec-24E EPS). However, due to the recent rally in the stock price and limited upside on its TP, the brokerage downgrades its rating to ADD.

Promoter/FII Holdings
Promoters held 70.45 per cent stake in the company as of 30-Sep-2022, while FIIs owned 1.89 per cent, DIIs 4.4 per cent.