Afcons Infrastructure Limited

Afcons Infrastructure Limited is the flagship infrastructure, engineering and construction company of the Shapoorji Pallonji group, a diversified Indian conglomerate, and have a legacy of over six decades. During the period comprising the last eleven financial years and the three-month period ended June 30, 2024, they have successfully completed 79 projects across 17 countries with a total historic executed contract value of Rs 563.05 billion. As of June 30, 2024, they have 65 active projects (i.e., ongoing projects) across 12 countries, aggregating to an order-book of Rs 317.47 billion. Over the years, company has expanded its presence globally and in particular across Asia, Africa and the Middle East. They have undertaken many complex, challenging, unique and 'first of its kind' infrastructure projects in India and the rest of the world. Further, company maintains a strategic equipment base comprising a wide range of heavy machinery and specialized equipment. This equipment base, along with the ability to source other high-tech equipment and the in-house capabilities in managing specialized equipment, has been instrumental in winning several complex projects, such as the Atal tunnel, the High Speed Railway Project, the Delhi – Meerut regional rapid transit system, Delhi Metro Phase IV projects, and the second liquid cargo berth at Dahej, Gujarat for Gujarat Chemical Port Limited. As per financial performance, Afcons Infrastructure Limited has posted total income / net profits of Rs 11,269.55 Cr / Rs 357.61 Cr (FY22), Rs 12,844.09 Cr / 410.86 Cr (FY23), Rs 13,646.87 Cr / Rs 449.74 Cr (FY24) and Rs 3,213.47 Cr / 91.59 Cr (30.06.24 FY25). So as per previous financials data, company has shown good results and steady growth. Also, the order book as on RHP date is Rs 563.05 billion. Company has an average EPS of Rs 12.37 and average RoNW of 12.84% for last three fiscals. Issue is priced at a P/BV of 4.31 as per NAV of Rs 107.48/- as on 30.06.24. If we attribute latest earnings of FY23, FY24, TTM upto Q1 FY25 and annualised FY25, then asking price is at a P/E of around 41.44, 37.86, 37.81 and 46.48 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, six lead managers are associated with this IPO, and have handled around 114 IPOs in last three fiscals. As per financials, Afcons Infrastructure Limited has shown good results, RoNW is 12.58% and P/E is 41.44, 37.86, 37.81 and 46.48 respectively as per FY23, FY24, TTM upto Q1 FY25 and annualised FY25 earnings. So, issue looks fully priced as compared to listed peers and order book as on RHP date is Rs 563.05 billion. Company is the infrastructure, engineering and construction company of the Shapoorji Pallonji group, which is very competitive and fragmented business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

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