scorecardresearchPSP Projects reaches record high on order win; up nearly 14% in three months

PSP Projects reaches record high on order win; up nearly 14% in three months

Updated: 03 Jan 2023, 12:57 PM IST
TL;DR.
In the last three months, PSP Projects has climbed from 642.15 apiece to its current level of Rs. 730, generating a decent return of 13.70%. Over the past one year, the stock has produced a return of nearly 50%.
During the quarter, the company timely completed 10 projects which included High rise commercial building in GIFT city, a Corporate office building for Indian Potash Limited.

During the quarter, the company timely completed 10 projects which included High rise commercial building in GIFT city, a Corporate office building for Indian Potash Limited.

Shares of PSP Projects, a construction firm, surged 5.65% to reach a record high of 747.55 apiece during Tuesday's trade.

This came after the company announced that it was the low bidder (L1) for a government project worth 1,364.47 crore (excluding GST) for the "Construction of a State of the Art High Rise Office Building" for the Surat Municipal Corporation in Surat, Gujarat.

"We hereby confirm that none of the directors or promoters or promoter group or group company has any interest in the entity/entities inviting tender, and it does not fall within the purview of related party transactions," the company added.

The stock began the trading session higher at 744 apiece compared to the previous closing price of 707.55, and the it rallied further to reach an all-time high of 747.55 in the early trade. At 12:30 p.m., the stock was trading at around 723, up 2.05%, compared to a 0.17% rise in the benchmark Nifty.

In the last three months, the stock has climbed from 642.15 apiece to its current level of Rs. 723, generating a decent return of 12.61%. Over the past one year, the stock has produced a return of nearly 50%.

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Stock price chart of PSP Projects.

On the fundamental side, the company posted a 40.93% YoY drop in its consolidated net profit to 21.5 crore in Q2FY23 as against a net profit of 36.4 crore in the same quarter of the last fiscal. Sequentially, the net profit was down by 25.86 percent.

It reported a 7.21 percent YoY drop in total revenue to 366.3 crore in September quarter compared to 394.8 crore in the same period last year.

The operating profit fell sharply by 28 percent YoY to 39.5 crore in Q2 from 54.7 crore in Q2FY22, and it was down 17.53 percent compared to the preceding quarter.

The company reported a lower EBITDA margin of 10.97% during the quarter, a drop of 304 bps YoY due to the seasonally challenging quarter, which was impacted by the monsoon and many projects being in the initial stage of execution.

The total order book of the company stands at 5,081 crore as of September 30, 2022. The bidding pipeline includes 45% of the project from private parties and 52% of the total projects from the State of Gujarat.

"In comparison to all previous H1, the company has received the highest ever order inflow of Rs. 1,512 crore in H1FY23 as compared to Rs. 637 crore in H1FY22, a growth of 137% year on year," the company said in its Q2 earnings report.

During the quarter, the company timely completed 10 projects which included High rise commercial building in GIFT city, a Corporate office building for Indian Potash Limited. 

"We believe that owing to healthy balance sheets, access to capital, and many unlisted or weaker players being hunted out of the market, the market share of large organised players is set to grow further in the next 2-3 years," the company added.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

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First Published: 03 Jan 2023, 12:57 PM IST