Sadbhav Engineering, too, appears often among the aforementioned top picks. As its order inflows are driven by the road segment (pick up in industry awards and reducing competition), the current order book of around Rs 7,710 crore (2.3xFY17 revenues) provides strong revenue visibility for the company. With another Rs 6,000 crore in orders expected in FY18, its BOT (build-operate-transfer) projects, too, are providing stable cash flows now, say analysts, and would improve execution capacity. IIFL expects the company's top-line and earnings to grow 19 and 22 per cent annually, respectively, between FY17 and FY20. Kotak Securities says that with its diverse expertise, the company is well set to capitalise on the upcoming opportunities in roads, metros, and affordable housing, as well as industrial order inflows.
At least two brokerages remain bullish on PNC Infratech. Analysts at Kotak Securities say that PNC has a robust current order book of Rs 11,000 crore and has a robust pipeline of orders, specifically in the road space, which gives strong revenue growth visibility for the next five years. The company, however, has lagged in execution during the first half of FY18. Almost all the projects should start contributing by the March quarter, say analysts at IIFL. They also expect strong top-line growth for the company during FY19 and FY20.
Among others, for Ashoka Buildcon, the confidence stems from the fact that it is well placed to benefit from upcoming opportunities in the roads sector, given its well-funded balance sheet. Its healthy order book lends confidence to EPC revenue CAGR (compound annual growth rate) of 19 per cent from FY17 to FY19, says MOSL.
NCC's healthy order book, stable margins, and reasonable leverage is likely to lead to CAGR of 10 per cent on revenues and 25 per cent on reported profits from FY17 to FY19, say analysts at Kotak Securities.
The strong balance sheet and execution track record of Sadbhav engineering, whose EPC business remains in a sweet spot, provide comfort, say analysts. With a healthy and diversified order book of Rs 8,400 crore for the construction business, MOSL expects annual order flows of Rs 6,000 crore (EPC and HAM projects) for the next two years.
For IRB Infrastructure, mature road projects provide strong comfort on near-term earnings and cash flows while recently-commissioned and under-construction projects provide long-term visibility, feel analysts. MOSL expects revenues to grow at 26 per cent CAGR from FY17 to FY19 and earnings to grow eight per cent CAGR during the period.
Dilip Buildcon expects a strong Rs 10,000 crore in orders during FY18, mainly driven by the roads segment. Further, the recent sale of its BOT portfolio at 1.05x book value (inflows of Rs 700 crore) would reduce standalone debt significantly and a gradual improvement in working capital would keep return ratios elevated, feels IIFL.
For Simplex Infrastructure, Kotak Securities expects a 17.9 per cent upside as order inflows increase going forward during the financial year due to improvement in macroeconomic climate.