Simplex Projects
Building on opportunities in Kolkata
Wholly owned subsidiary installs, develops, operates and maintains multi-level automated
car parking systems
Simplex Projects is under the control of Balkrishandas Mundhra, who has separated
from his brother. (The brother runs the already listed Simplex Infrastructure.) Portfolio
of completed and ongoing civil construction projects includes commercial and residential
buildings, group housing projects and townships, industrial structures, hospitals, and
universities and educational campuses. The infrastructure projects have been in the road,
and irrigation and water supply segments.
Simpark Infrastructure, a wholly owned subsidiary of Simplex Projects, installs,
develops, operates and maintains multi-level automated car parking systems in Kolkata. It
has completed two multilevel, fully-automated car parking projects.
To fund the acquisition of plant and machinery, investment in subsidiary, and augment
long-term working capital, Simplex Projects is coming out with an IPO.The price band has
been fixed at Rs 170-185. The issue opens on 10 July and closes on 13 July
2007.
Strengths
- The order book of Rs 290 crore represents two times the reported financial year ending
Mach 2007 (FY 2007) revenue. The schedule dates for completion of projects range from July
2007 to March 2009.
- Each of the verticals is witnessing significant investment.
Weaknesses
- Over-dependant on construction opportunities in and around Kolkata.
- Negative net operating cash flow in FY 2005, FY 2006 and FY 2007
- The pilling segment has the highest earning before interest, depreciation, tax and
amortisation (EBIDTA) margin of about 22-23%. The execution period of pilling contracts,
which are of small size, is low. Thus, the growing order book could make it difficult to
maintain the proportion of pilling business, thereby impacting margin.
Valuation
Standalone FY 2007 EPS on post-issue equity works out to Rs 8.7. Simplex Projects has
not given consolidated financials. If one simply adds the profit of the subsidiary to the
standalone profit, the consolidated EPS works out to Rs 11.3. At the offer price band of
Rs 170-Rs185, the P/E range on the basis of standalone EPS works out to 19.5 to RS 21.3
and on the basis of assumed consolidated earning it is 15.4-16. Unity Infraprojects, the
nearest comparable company, is trading at P/E of around 21.
Simplex Projects: Issue Highlights |
| Sector |
Construction - Civil / Turnkey - Medium / Small |
| Sector TTM P/E |
32.05 |
| No. of shares fresh issue |
3,000,000 |
| Price band (Rs) |
Rs 170-185 |
| Post-issue equity (Rs crore) |
12.0 |
| Post-issue promoter & promoter’s group stake (%) |
58.00 |
| Issue open / close |
10-7-2007/13-7-2007 |
| Listing |
BSE, NSE |
| Rating: |
45/100 |
Simplex Projects: Financials |
| Particulars |
0303 (12) |
0403 (12) |
0503 (12) |
0603 (12) |
0703 (12) |
| Sales |
41.57 |
60.67 |
71.15 |
82.20 |
135.76 |
| OPM (%) |
7.7 |
7.0 |
8.4 |
10.7 |
13.8 |
| Operating Profits |
3.19 |
4.27 |
6.00 |
8.79 |
18.76 |
| Other Income |
0.26 |
0.19 |
0.24 |
0.38 |
0.49 |
| PBIDT |
3.45 |
4.46 |
6.23 |
9.16 |
19.25 |
| Interest |
2.01 |
2.30 |
3.03 |
4.15 |
6.40 |
| PBDT |
1.43 |
2.17 |
3.21 |
5.01 |
12.84 |
| Depreciation |
0.34 |
0.45 |
0.64 |
0.83 |
0.98 |
| PBT |
1.10 |
1.72 |
2.57 |
4.18 |
11.86 |
| EO |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| PBT after EO |
1.10 |
1.72 |
2.57 |
4.18 |
11.86 |
| Tax |
0.42 |
0.43 |
0.74 |
0.37 |
1.37 |
| PAT |
0.68 |
1.29 |
1.83 |
3.81 |
10.49 |
| EPS (Rs.)* |
0.6 |
1.1 |
1.5 |
3.2 |
8.7 |
* EPS calculated on post-issue equity of Rs 12 crore.
Face Value Rs 10.
Figures in Rs crore.
Source: Capitaline Corporate Database |
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