Buy Capacit'e Infraprojects, target Rs 402: IIFL

IIFL has a buy call on Capacit'e Infraprojects Ltd. with a target price of Rs 402.0 . The current market price of Capacit'e Infraprojects Ltd. is Rs 295.6 Time period given by the brokerage is a year when Capacit'e Infraprojects Ltd. price can reach the defined target. .

Investment rationale by IIFL
Capacite’s FY18 reported PAT disappointed on lower execution, margin contraction and higher depreciation post Ind-AS adoption and GST related re-negotiation. However, large order book should drive acceleration in revenue in FY19-20. On-track execution with some short cycle orders, slower increase in employee costs should aid stable margins. Management is also confident on normalisation of elongated receivables cycle over next two quarters. We cut estimates by 6-8% for FY19-20 on lower revenues and slightly higher depreciation. We maintain BUY with TP of Rs402 (20x FY20ii PER).