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Maducon Projects

Company Update: Madhucon Projects Ltd (MPL)
• Madhucon projects is set to benefit from continued focus of government on infrastructure especially road projects
• Company’s core business is diversified across roads, buildings, irrigation and power while construction on the road BOT projects is likely to get over in FY10.
• We upgrade our price target for the company based on significant re-rating of the construction sector post the election results
• We now value core business of the company at 7.5x one year forward earnings as against 4x assumed earlier and arrive at a price target of Rs.167 on sum of the parts methodology based on FY10 estimates. (Rs.113 earlier). However, based on limited upside from the current levels, we downgrade the stock to ACCUMULATE from BUY earlier.