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Epic Research
Capacite Infraprojects (Buy)
CMP: ₹269.75
Target: ₹315
Growth drivers: a) A & B category developers’ market share has increased consistently with volume growth of 30-35 per cent volume growth y-o-y in the last four quarters.
b) India’s office space per capita is 0.4x which is one of the lowest in their world.
c) Huge 34 million square feet to be available for new mall space by FY22.
d) The warehousing space in India is expected to be at 344 million sqft by 2022.
c) Strong order book with ₹7,177 crore order backlog — strong revenue visibility
d) Marquee client base resulting into repeat orders and yielding a large order book.
Valuation: Capacite is a long-term play at current levels. It has gained traction as a preferred contractor for high rise and residential construction space. Clientele includes names such as Kalpataru, Wadhwa Group, Godrej Properties, Oberoi Realty, etc, which company has managed to retain and attract repeat orders.
It has a strong order book that provides revenue visibility. Stock is currently at attractive valuations. We value stock at 2.25x of FY19 BV and 15x of one year forward earnings with a target price of ₹315 in 3-4 quarters.
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