Axis Securities Issues Buy Call On Man Infraconstruction With A Target Price of Rs 240

Axis Securities, a prominent domestic brokerage firm, has issued a 'BUY' recommendation for the real estate company Man Infraconstruction Ltd (MICL), setting a target price of Rs 240 per share. The stock is currently trading at Rs 186.84 on the National Stock Exchange (NSE), reflecting the brokerage's bullish outlook on the company's future performance.

In its detailed report, Axis Securities highlights the use of a Discounted Cash Flow (DCF) approach to value Man Infraconstruction, arriving at a Net Present Value (NPV) of Rs 4,434 crore and a Terminal Value of Rs 4,938 crore. This comprehensive valuation underpins the 'BUY' rating, with the target price set at Rs 240 per share.

The brokerage emphasizes that Man Infraconstruction is strategically focusing on maintaining an asset-light portfolio while demonstrating strong execution capabilities. The company's ongoing and upcoming redevelopment projects, coupled with Integrated Ventures (IV) and Development Management (DM) initiatives, ensure quick turnaround times and faster project completions. One notable success is the Ghatkopar Aaradhya OnePark project, where 50% of the units have already been sold. Additionally, the company has secured a new project in the Bandra-Kurla Complex (BKC) area, projected to generate a topline of approximately Rs 750 crore.

Axis Securities notes that Man Infraconstruction is preparing to launch larger projects by the second half of FY25, supported by a pipeline of 6.1 million square feet. The company's Engineering, Procurement, and Construction (EPC) order book currently stands at Rs 728 crore. With an estimated sales visibility of around Rs 15,000 crore and a strong cash flow position, the brokerage believes that MICL is well-positioned to deliver sustainable and robust performance in the coming years.

Man Infraconstruction's stock has shown significant growth, surging by approximately 3.5% today and 30% over the past year. Over the last five years, the stock has skyrocketed by 1100%, highlighting its strong performance and investor confidence.

However, the company recently reported a decline in its standalone quarterly financials. For the quarter ending June 2024, net sales were Rs 107.63 crore, down 70.32% from Rs 362.62 crore in June 2023. Net profit for the quarter also decreased by 39.68% to Rs 38.20 crore, compared to Rs 63.32 crore in the previous year. EBITDA stood at Rs 53.85 crore, reflecting a 38.33% decline from Rs 87.32 crore in June 2023. The Earnings Per Share (EPS) also dropped to Rs 1.03 from Rs 1.71 in the corresponding quarter of the previous year.

Last month, Man Infraconstruction achieved a significant milestone with the Aaradhya OnePark project, reporting nearly 50% sales within just six months of its launch in January 2024. This rapid sales success underscores the strong market demand for luxury residences in Mumbai. Aaradhya OnePark, located on the prestigious 60 ft. Road in Ghatkopar East, offers ultra-luxurious 3, 4, and 5 BHK residences.

Man Infraconstruction Ltd is a leading integrated Engineering, Procurement, and Construction (EPC) company with extensive experience in various construction segments, including port, residential, commercial, industrial, and road construction projects across India. The company's expertise and execution capabilities have positioned it as a significant player in the Indian real estate and infrastructure sectors.