Stocks to buy: Centrum picks 4 infrastructure stocks for up to 35% upside

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Also Read: Stocks to buy: Zomato, Nykaa, PB Fintech among JM Financial’s top picks in internet sector ahead of Q2 results Among the infra stocks, Centrum Broking has a Buy rating on G R Infraprojects, HG Infra Engineering, KNR Constructions and PNC Infratech. Centrum Broking builds in 5% and 2% YoY increase in Revenue and PAT for GR Infraprojects on account of weak order inflow in FY23. The order inflow momentum has not picked up yet with only 2 order wins aggregating to ₹1,820 crore, YTDFY24.

EBITDA margins are expected to remain stable at 14.5%, flat on QoQ basis. As a result, absolute EBITDA is likely to increase by 4.1% YoY respectively. Despite a healthy orderbook of ₹26,800 crore (including L1 orders), the executable orderbook is currently only ₹10,700 crore (1.3x FY23 revenue).

Overall equity requirement for the company including support for the BOT assets is in excess of ₹2,500 crore and hence asset monetization through InvIT is a must, for which, the company has received an observation letter from SEBI for the InvIT IPO, the brokerage house said. It expects execution to pick up sharply post 3QFY24. It has a ‘Buy’ rating on the stock with a target price of ₹1,603 per share, implying an upside of 32% from Thursday’s closing price.

(Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) HG Infra’s orderbook stood at ₹11,670 crore as on June 30, 2023. Out of the 4 HAM projects lined up for monetization, the company has received approval for 3 projects amounting to EV of ₹1,090 crore which translates to equity value of ₹400 crore. The completion of the sale is expected in November 2023 which would free up capital for