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Wednesday, January 6, 2010

Buy PBA Infrastructure

PBA Infrastructure is a good buy at current market price. As infrastructure is a promising sector based on domestic development across the country, PBA infra is expected to deliver robust results in future. Company has strong presence in highway construction and road development.

CAGR of PBA in last 3 years is above 20 percent, operating margins have improved looking at last 3 quarter results. At current market price, stock is discounted comparing with small cap peers like subhash project, gayatri infra, unity infra and Maytas. With a market cap of around 100 crore, PBA infra is currently trading at a price of 76 with PE of merely 6.5. All other peer stocks are trading at a PE range of above 25 to 100 which makes PBA Infrastructure an excellent bet at current market price.

PBA promoters shareholding is increased by around 62 percent and is increased by approx 0.75 percent in last one year. Looking at recent annoucement by the management, company received a payment of 150 crore plus for development of 4 lane highway project at nagpur.

With strong order book of 500 crore plus, stock can shoot upto 3 digit very soon with a target of 120. Keeping a medium to long term view of 12 to 18 months, PBA infrastructure can see a price of 200.

Resistence is at 82-84 and strong support is at 68 Rs.

We suggest investors to buy PBA infrastructure with a medium to long term target of 200 Rs.