Long term players can invest in Ramky Infra IPO:Sharekhan

MUMBAI: Sharekhan is of the view that Ramky Infrastructure’s strong order book position provides strong visibility in revenue growth in the coming years. According to the brokerage, investors with long term horizon can invest in the stock.

Ramky Infrastructure has entered the capital market with public issue of Rs 530 crore by issuing shares of face value Rs 10 in the price band of Rs 405-468 per share. The issue closes Thursday.

“Ramky Infra has witnessed an impressive growth rate both in terms of revenue and net profit over the past few years. Its revenue and profit after tax (PAT) grew at a compounded annualised growth rate (CAGR) of 44% and 49% respectively over FY2007-FY2010.
Further its strong order book position of Rs10,579 crore provides strong visibility in revenue growth in the coming years. The offer is priced in a band of Rs405 to Rs468, resulting in a price/earning (P/E) of 18.3-20.7x its FY2010 earnings respectively.

It is slightly expensive when compared with valuations of it’s peer group companies. However investors with long term horizon can invest in this stock given the opportunity in the infrastructure sector and its diversified nature of order book which would help the company to tap this opportunity,” the report said.