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Madhucon Projects

Result Update: Madhucon Projects.

• Madhucon Projects Ltd reported 43% YoY growth in revenues for Q1FY11 which was better than market estimates. This was led by strong order book.

• Operating margins stood at 10.68% for Q1FY11, marginally lower than the estimates. Company expects to maintain margins in the range of 11% for the full year.
• Net profits registered a growth of 3% YoY and are impacted by decline in margins in comparison with last year.
• At current price of Rs 153, stock is trading at 17x and 14.6x P/E for FY11 and FY12 respectively. Adjusted with BOT assets valuations, stock is trading at 6.3x and 5.4x P/E for FY11and FY12 respectively.

• Hence longterm investors can buy on declines a price target of Rs 186 on sum of the parts methodology on FY11 estimates.