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HDFC Securities
Capacite Infraprojects (Buy)
Target: ₹147
CMP: ₹114.70
Capacite Infraprojects has reported broadly in-line Q1-FY21 performance. The good part is that the worst is over as we foresee m-o-m/q-o-q execution ramp-up. CIL is well-placed for cyclical recovery on the back of robust order backlog (7x FY20 revenue).
The management allayed liquidity concerns with no plans of equity fund raise and likely reduction in debt as execution and collections improve. The order book is well balanced between Public/Pvt at 55:45. CIL has started seeing the return of migrant workers with the numbers improving from 2,000 (third week of June-20) to 4,000 as of now and expected to further ramp-up to 5,000 by Aug-20 end. CIL has restarted 90 per cent of the private sites and 99 per cent of government sites
The balance sheet is stable, labour availability has improved to nearly 45 per cent, and all sites have restarted. CIL has received further ₹110 crore of CIDCO project advance, implying project remains on track (43 per cent of order book). CIL has received CRZ/EC approvals for all seven sites. Work has started on 5/7 sites with balance two sites ground breaking planned for Aug/Sep-20 respectively. Labour ramp-up will take place from Sep-20. Meaningful contribution from CIDCO is expected from Q4-FY21.
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