Hold Punj Lloyd; target of Rs 91: Emkay

Emkay Global Financial Services has recommended hold rating on Punj Lloyd with a target of Rs 91, in its February 28, 2011 research report.

“Punj Lloyd’s exposure to Libya stands at Rs 98 billion or 35.4% of Dec’10 order backlog of Rs 277.8 billion. No progress on Libyan orders worth Rs 62 billion (placed on SEC) - fortunes for which always stood at abeyance. Commenced execution on projects worth Rs 36 billion - Punj Lloyd is cash positive to the tune of Rs 2.65 billion. For FY12E, Libyan contribution at 4% of revenues and 18% of net profit. Punj Lloyd’s exposure to Libya stands at Rs 98 billion or 35.4% of Dec’10 order backlog of Rs 277.8 billion. Further, there was no progress on Libyan orders worth Rs 62 billion (placed on Sembawang Corporation) - fortunes for which always stood at abeyance. These orders were not factored for execution and revenue booking in ensuing quarters . Some progress was accorded on Libyan orders worth Rs 36 billion placed on Punj Lloyd - however progress remain tardy as mentioned in Q3FY11 result update. On exclusion of Libya orders from order backlog, Punj Lloyd forward order book stands at 2.1X FY11E revenues - lending revenue visibility for 8 quarters.”

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