PSP Projects has focused on its core competency, profitable growth & value creation.
Posted: Sat Nov 23, 2024 6:39 pm
PSP Projects has focused on its core competency, profitable growth & value creation. Its strategic alliance with Adani to unlock large opportunities. Out of current orderbook of ₹65bn, ₹5bn is from Adani. ₹35-40bn order inflows expected. TP 792 (+30%)
"PSP Projects (PSPPL IN) recently signed a definitive agreement with Adani Infra (100% owned by the Adani Group) to sell ~30.07% stake (~50% of total promoter stake of ~60.14%) for INR ~6.9bn, valuing the company at INR 22.8bn. The strategic partnership augers well for both parties: it will not only help Adani Infra to strengthen its building segment along with current project management consultancy (PMC) exposure to large infrastructure areas, such as ports, roads, airports, water, data centers, power projects, cement, and T&D but also help PSPPL increase scope of new work orders within its core building sector by getting projects from the Group. With existing promoters and management team continuing with an equal stake in the partnership, this strategic alliance is likely to strengthen growth prospects and value creation in the long term. We retain our positive stance on PSPPL. We reiterate Buy with a TP of INR 792. The deal is subject to regulatory approval, including completion of the open offer (despite the open offer, 50:50 partnership would be maintained). Key Risks: Any adverse news against the Adani Group will have a negative impact on the stock."
"PSP Projects (PSPPL IN) recently signed a definitive agreement with Adani Infra (100% owned by the Adani Group) to sell ~30.07% stake (~50% of total promoter stake of ~60.14%) for INR ~6.9bn, valuing the company at INR 22.8bn. The strategic partnership augers well for both parties: it will not only help Adani Infra to strengthen its building segment along with current project management consultancy (PMC) exposure to large infrastructure areas, such as ports, roads, airports, water, data centers, power projects, cement, and T&D but also help PSPPL increase scope of new work orders within its core building sector by getting projects from the Group. With existing promoters and management team continuing with an equal stake in the partnership, this strategic alliance is likely to strengthen growth prospects and value creation in the long term. We retain our positive stance on PSPPL. We reiterate Buy with a TP of INR 792. The deal is subject to regulatory approval, including completion of the open offer (despite the open offer, 50:50 partnership would be maintained). Key Risks: Any adverse news against the Adani Group will have a negative impact on the stock."