Realty Stock Hits 52W-High On Getting BUY Rating From Axis Securities; Target Price?

In 1964, Man Infraconstruction (MICL) was founded, mostly as an engineering contracting company. As a strategic growth, they later entered the real estate sector in 2012. 87% of the project portfolio of the company comes from the real estate industry. Following a buy call rating from broking company Axis Securities with a target price of Rs 280, Man Infraconstruction's shares began on the BSE on Monday at Rs 255.05 per share and then surged to reach a 52-week high of Rs 262.50. In light of upcoming project launches, the new port tender, and robust sales from ongoing projects, Axis Securities has recommended Man Infraconstruction shares as its stock pick of the week for long-term investors.

Key Reasons To Buy The Shares of Man Infraconstruction

According to Axis Securities, investors should be aware of the reasons that follow for buying Man Infraconstruction shares before making an investment.

Launches are Staggered for Upcoming Quarters: The company's upcoming launches are critical to meeting its launch guidance for FY25. The pipeline includes developments in Vile Parle, Marine Lines, Malabar Hills, Royal Netra (Goregaon), Dahisar (new phase), and Bandra. Among these, the Vile Parle and Marine Lines projects are expected to be launched by the end of FY25. The Vile Parle project has a sales potential of Rs 1,200 Cr, while the Marine Lines project is estimated at Rs 2,100 Cr. The company has guided for a pre-sales growth of 30%-35%, translating to approximately Rs 1,000 Cr. For H1FY25, it has already achieved pre-sales worth Rs 900 Cr, demonstrating strong execution capabilities and robust sales performance.

Vadhvan Port Project Tender: The Mumbai Vadhvan Port project has opened bids for near-shore reclamation and protection works valued at Rs 1,700 Cr under the EPC model. With an estimated total project cost of Rs 76,220 Cr and spanning 1,448 hectares, the project offers a substantial opportunity for MICL to participate in its construction. Considering MICL's proven execution record, the company is a strong contender for this large-scale venture. Securing the contract could significantly enhance its EPC revenue contribution. With an execution margin of ~21%-25%, MICL is well-positioned to leverage its expertise and capitalize on this opportunity effectively.

Outlook & Guidance: The company's upcoming launches in H2FY25 are expected to contribute to its DM fees, while sales from existing projects could directly enhance profitability. Collections are projected to grow at a healthy CAGR of ~26% over FY24-FY27E. With an EBITDA margin of ~25%, the company is well-positioned to generate robust cash flows in the coming years. While net sales recognition may decline due to its asset-light business model, profits are showing consistent growth on a YoY basis, reflecting strong operational efficiency and effective cost management.

Man Infraconstruction Share Price Target

"We recommend a BUY rating on the stock with a target price of Rs 280/share, implying an upside of 10% from the CMP," said the research analysts of Axis Securities in a note.

Man Infraconstruction Financials

In Q2 FY25, the company's consolidated net profit dropped 36.05% to Rs 44.54 crore from Rs 69.65 crore in Q2 FY24. In the quarter that ended on September 30, 2024, revenue climbed 6.98% year on year to Rs 230.32 crore, the company said in a stock market filing. According to Man Infraconstruction, EBITDA fell 57.53% to Rs 27.6 crore in Q2 FY25 from Rs 65 crore in Q2 FY24, and the EBITDA margin dropped to 12% in Q2 FY25 from 30.2% in Q2 FY24.

Man Infraconstruction News

After receiving an amount totalling Rs. 36,05,37,750/- at the rate of Rs. 116.25/- per warrant, the Allotment Committee of the Board of Directors of Man Infraconstruction Limited approved the conversion of 31,01,400 convertible warrants into 31,01,400 equity shares on December 20, 2024, at an issue price of Rs. 155/- per share, including a premium of Rs. 153/- each. Following the allocation of the aforementioned equity shares, Man Infraconstruction notified stock exchanges that the company's subscribed and paid-up capital had increased from Rs. 74,43,76,330/-, which included 37,21,88,165 equity shares with a face value of Rs. 2/- each fully paid up, to Rs. 75,05,79,130/-, which included 37,52,89,565 equity shares with a face value of Rs. 2/- each fully paid up.

Following the conversion of warrants that were distributed or granted on a preferential basis, the following parties were given equity shares: Suresh Eknath Kolhatkar, Chhattisgarh Investments Ltd, Moneyleader Finance India Pvt Ltd, Ritu Wadhwa Makhiia, Resonance Opportunities Fund, and Quant Mutual Fund.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.