Supreme Infrastructure India is entering the capital market on 21st September, 07 with a public issue of 34.75 lakh equity shares of Rs.10 each in the band of Rs.95 toRs.108 per share.
The company is a medium sized construction company having completed 56 projects, since 1966 for about Rs.198.77 crores, till 31-07-07. It is executing work for MHAI, MMRDA, MSRDC, PWD, MCGM, Mumbai Port Trust, AAI, BMC and RCF. The work on hand as on 1st August, 07, is of Rs.299.84 crores from MPT, Sadbhav Engg. and NHAI. The major work is of Rs.104 crore, for NH4 for rehabilitation and upgradation of Chitradurga section of about 18 km. from NHAI. Another work is of Rs.80.36 crores on NH3 from Sadbhav Engg. The company is executing a Rs.4.70 crore project for MUTP for laying railway tracks between Vidyavihar and Ghatkopar as a part of Kurla - Thane (Phase I) railway project, which would be completed by 30-09-07. Completion of this project will strengthen the company's abilities to bid for such specialized projects, which has high margin.
The company also has Ready Mix Concrete (RMC) plant, Wet, Mix Plant and the Asphalt Plant located at Powai, in Mumbai and a quarrying and crushing unit in Bhiwandi. Land of 24.35 are for RMC plant and quarrying and crushing activities at Bhiwandi, is owned by the company, while the land at Powai is on lease from the promoters of the company. Both these can have huge value, unlocked over a period of time.
For FY 07, the company had contract income of Rs.81.89 crores and PBT of Rs.14.73 crores with PAT of Rs.12.65 crores, on equity base of Rs.10.40 crores, giving an EPS of Rs.12.16. For 3 months ending 30-06-07 the total work executed by the company were of Rs.39.44 crores with PBT of Rs.6.53 crores and PAT of Rs.5.78 crores, resulting in an EPS of Rs.5.55.The EBITDA margin of the company is very high at 22% with PAT margin of about 15% against industry average of 14% and 5% to 6% respectively. This kind of margin has been reported by the company for FY 05, FY 06, FY 07 and first quarter of FY 08.
The total debt of the company as at 30-06-07 was about Rs.45 crores, which are backed by net fixed assets of Rs.36 crores and net current assets of Rs.55 crores. Net worth of the company was at Rs.45.38 crores. Now 25% stake is diluted for about Rs.37.50 crore. This values the company at about Rs.150 crores, which is quite reasonable.
The company issued 3 lakh shares on 18-01-07, at Rs.80 per share, of which 2.58 lakh shares were subscribed to by J M Financial and its promoter, Vishal Kampani.
The company, though have been executing small projects, is now carrying out big projects of Rs.100 crores and above with very high margins. This maybe possible due to back up facilities of RMC and stone quarry at their end. EPS for FY 08, maybe close to Rs.16 on expanded equity base of Rs.13.88 crores. Hence, share is issued at a PE of less than 7, which leaves tremendous scope of appreciation on listing as well as in long term.
An excellent bet, to invest at the upper band, for listing gain as well as, for long term investment for portfolio.