ITD Cementation: PAT growth of 111% & Revenue growth of 61% in H1-24 at a PE of 27
37%+ revenue growth in FY24 followed by 25% growth in FY25 on the back of a strong order book. Strong bidding pipeline in place to fuel future growth for ITDCEM.
1. EPC player undertaking Heavy Civil & Infrastructure projects
itdcem.co.in | NSE : ITDCEM
2. FY20-23: PAT CAGR = 42% & Revenue CAGR = 21%
3. Strong FY23: PAT up 80% & Revenue up 34%
4. Strong Q1-24: PAT up 73% & Revenue up 67%
5. Strong Q2-24: PAT up 168% & Revenue up 56%
6. Strong H1-24: PAT up 111% & Revenue up 61%
7. Business metrics: Improving return ratios
8. Outlook: 37% revenue growth in FY24 followed by 25% growth in FY25
i. 37%+ top-line growth in FY24
Revenue expected to grow to Rs 7,000 cr+ in FY24 implies a 37%+ growth in FY24.
I think, we'll maintain the same, which is around INR 7,000-core-plus in the top line. We hope that EBITDA will be just 10% above this end of the year.
ii. 25% top-line growth in FY25
So, revenue-wise, we should be able to achieve around 25% more than this year.
iii. Strong order-book: Multi year revenue visibility
Robust orderbook of Rs 22,080 crore
Diversified order book to minimize risks from slowdown in any business areas
Strong bidding pipeline to fuel future growth
9. PAT growth of 111% & Revenue growth of 61% in H1-24 at a PE of 27
10. So Wait and Watch
If I hold the stock then one may continue holding on to ITDCEM
Coverage of ITDCEM was initiated after Q1-24 results. The investment thesis has not changed after a strong H1-24. The only changes are the delivery of a strong H1-24 and the increased confidence in the management to deliver a stronger FY24
ITDCEM management is indicating for a H2-24 stronger than H1-24
We have to consider that in Q2 due to monsoon revenue was a little less. So normally, Q3 and Q4 we can expect better revenues than Q1 and Q2.
Order book is strong, 4X+ FY23 revenue, with indications of margin expansion
One needs to wait and keep watching for efficient execution of order book and the new orders coming in each quarter.
11. Or else join the ride
If I am looking to enter ITDCEM then
ITDCEM has delivered PAT growth of 111% & Revenue growth of 61% in H1-24 at a PE of 27 which makes the valuations look reasonable.
Top-line growth of 37%+ in FY24 followed by 25% revenue growth in FY25 with expanding margins at a PE of 27 which makes the valuations look reasonable.
Guidance for 10% EBITDA implies bottom-line would grow faster than the top-line
Previous coverage on ITDCEM
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Disclaimer
It is an analysis of the company data and not a stock recommendation
My analysis can be completely wrong and can change the next minute based on changes in my understanding of the company
I look to own good companies at prices where there is a path to market beating returns over decades