11 th September, 2010 ANS Research Desk (Research Wing of ANS Pvt Ltd) “ARHAM” Financial Centre Harihar Chowk, RAJKOT (Guj) Speak to: 0281 – 6699401 Drop a line to: [email protected]MAN INFRACONSTRUCTION LIMITED Research Team, Bhaskar Patel Pranav Mehta
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Mumbai. Man Infra has undertaken projects in six States viz. Maharashtra, Kerala, Gujarat,
West Bengal, Goa and Tamil Nadu. Man Infra provides construction services for port
infrastructure, residentia
company has executed significant onshore port infrastructure projects in the following ports in
India: Jawaharlal Nehru Port Trust, Mundra Port, Chennai Port, Vallarpadam Port and Pipavav
Port. Port infrastructure projects are complex and their execution generally requires strict
adherence to exacting international quality standards and tight timelines.
In the residential sector, the company works with real estate developers in Mumbai and
Maharashtra and is in the process of constructing a residential complex in the western suburbs
of Mumbai with an aggregate area of 1.95 million square feet, a slum rehabilitation authority
project in Mumbai consisting of the construction of a towns
feet and the construction of 5,166 tenements at a mass housing project at Pune
Man has been awarded an ISO 9001:2008 certification in July 2009 by SGS United Kingdom
Limited Systems and Services certification. Man Infra
Holdings Infrastructure Company Private Limited (Formerly
Limited) and Standard Chartered Private Equity (Mauritius) Limited having stakes of 9.2% &
6.9% respectively.
63%
29%8%
PROMOTER CB & INST PUBLIC
Recomm
BSE Code
NSE Code:
Overview
Man Infraconstruction Limited – is an infrastructure construction company headquartered in
Mumbai. Man Infra has undertaken projects in six States viz. Maharashtra, Kerala, Gujarat,
West Bengal, Goa and Tamil Nadu. Man Infra provides construction services for port
infrastructure, residential, industrial and commercial and road infrastructure projects. The
company has executed significant onshore port infrastructure projects in the following ports in
India: Jawaharlal Nehru Port Trust, Mundra Port, Chennai Port, Vallarpadam Port and Pipavav
Port. Port infrastructure projects are complex and their execution generally requires strict
adherence to exacting international quality standards and tight timelines.
In the residential sector, the company works with real estate developers in Mumbai and
Maharashtra and is in the process of constructing a residential complex in the western suburbs
of Mumbai with an aggregate area of 1.95 million square feet, a slum rehabilitation authority
project in Mumbai consisting of the construction of a township aggregating 5.16 million square
feet and the construction of 5,166 tenements at a mass housing project at Pune
Man has been awarded an ISO 9001:2008 certification in July 2009 by SGS United Kingdom
Limited Systems and Services certification. Man Infra currently has two PE investors SA (I)
Holdings Infrastructure Company Private Limited (Formerly
Limited) and Standard Chartered Private Equity (Mauritius) Limited having stakes of 9.2% &
6.9% respectively.
Recommendation Horizon: Long Term (1-2 Years)
BSE Code: 533169 Bloomberg Code: MINF IN Curr
NSE Code: MANINFRA Reuters Code: MANI
an infrastructure construction company headquartered in
Mumbai. Man Infra has undertaken projects in six States viz. Maharashtra, Kerala, Gujarat,
West Bengal, Goa and Tamil Nadu. Man Infra provides construction services for port
l, industrial and commercial and road infrastructure projects. The
company has executed significant onshore port infrastructure projects in the following ports in
India: Jawaharlal Nehru Port Trust, Mundra Port, Chennai Port, Vallarpadam Port and Pipavav
Port. Port infrastructure projects are complex and their execution generally requires strict
adherence to exacting international quality standards and tight timelines.
In the residential sector, the company works with real estate developers in Mumbai and Pune in
Maharashtra and is in the process of constructing a residential complex in the western suburbs
of Mumbai with an aggregate area of 1.95 million square feet, a slum rehabilitation authority
hip aggregating 5.16 million square
feet and the construction of 5,166 tenements at a mass housing project at Pune
Man has been awarded an ISO 9001:2008 certification in July 2009 by SGS United Kingdom
currently has two PE investors SA (I)
Holdings Infrastructure Company Private Limited (Formerly - Sabre Abraaj Capital Private
Limited) and Standard Chartered Private Equity (Mauritius) Limited having stakes of 9.2% &
Current MP: INR 337
Operational Areas
Port Infrastructure Man undertakes turnkey projects for multinational
conglomerates. Reclaiming land from the sea to facilitate construction of berths for ships to dock, building Container
Freight Stations, rail network, concrete paving works, electrical works, sewerage & drainage services, etc are some of the works carried out by it.
Residential Man Infraconstruction has mastered the art of constructing
good quality multi storeyed towers with the help of imported Aluminium shuttering materials (MIVAN Technology of Malaysia)
Commercial Man Infra construction is into construction of hotels, clubs, shopping malls, hospitals and schools and IT parks. From
core sector monoliths to heavyweights from the engineering and the service industries, Man Infraconstruction has carried out all works with singular distinction.
Industrial In the industrial sector, Man Infra’s services consist of the construction of manufacturing facilities such as industrial
factories and workshops Road Infrastructure In the road infrastructure sector, Man Infra provides following
services like earthwork, paving, sewerage, storm water
drainage, electrification, landscaping and arboriculture.
Client List
1). Adani Group 2). Bharti Airtel
3). DP World 4). D.B. Realty
5). Gateway Terminal India 6). Gujarat Pipavav Port Limited
7). Maersk India Pvt. Ltd. 8). Praj Industries
9). Simplex Infrastructure Ltd.
Mivan Technology
Mivan is basically an aluminum formwork system developed by one of the construction
company from Europe. In 1990, the Mivan Company Ltd from Malaysia started the
manufacturing of such formwork systems. Now a days more than 30,000 sq m of formwork
used in the world are under their operation. In Mumbai, India there are number of buildings
constructed with the help of the above system which has been proved to be very economical
and satisfactory for Indian Construction Environment. The technology has been used
extensively in other countries such as Europe, Gulf Countries, Asia and all other parts of the
world. MIVAN technology is suitable for constructing large number of houses within short time
using room size forms to construct walls and slabs in one continuous pour on concrete. Early
removal of forms can be achieved by hot air curing / curing compounds. This facilitates fast
construction, say two flats per day. All the activities are planned in assembly line manner and
hence result into more accurate, well – controlled and high quality production at optimum cost
and in shortest possible time.
In this system of formwork construction, cast – in – situ concrete wall and floor slabs cast
monolithic provides the structural system in one continuous pour. Large room sized forms for
walls and floors slabs are erected at site. These forms are made strong and sturdy, fabricated
with accuracy and easy to handle. They afford large number of repetitions (around 250). The
concrete is produced in RMC batching plants under strict quality control and convey it to site
with transit mixers. The frames for windows and door as well as ducts for services are placed
in the form before concreting. Staircase flights, façade panels, chajjas and jails etc. and other
pre-fabricated items are also integrated into the structure. This proves to be a major advantage
as compared to other modern construction techniques.
MIVAN aims in using modern construction techniques and equipment in all its projects. On
leaving the MIVAN factory all panels are clearly labeled to ensure that they are easily
identifiable on site and can be smoothly fitted together using the formwork modulation
drawings. All formwork begins at a corner and proceeds from there.
Source: Readers can get detailed information on the following website from which
The Z-score formula for predicting bankruptcy was developed in 1968 by Edward I. Altman, a
financial economist and professor at the Leonard N. Stern School of Business at New York University.
The Z-score is a multivariate formula that measures the financial health of a company and predicts
the probability of bankruptcy within two years.
** Since Man Infraconstruction got listed in 2010 we have calculated Z score for previous 3 years
through a different formula for which Z>2.90 is considered in Safe Zone while Z<1.23 is considered
as Bankrupt.
• It divides companies into three zones on basis of Z score
Z > 2.99 -“Safe” Zone
1.8 < Z < 2.99 -“Grey” Zone
Z < 1.80 -“Distress” Zone
• Man Infraconstruction is in the safe zone since it is having very Low Debt and its Sales as well
as Net Worth have increased on a consistent basis year after year.
Source: ANS Research
PARTICULARS 2010 2009 2008 2007
T1 0.56 0.69 0.21 0.62
T2 0.13 0.27 0.24 0.09
T3 0.30 0.50 0.36 0.30
T4 9.09 1.69 1.10 2.02
T5 1.17 2.20 1.79 1.21
Z SCORE 8.45 5.17 3.73 3.50
REMARKS Safe Safe Safe Safe
Investment Rationale
Good Client Base
Man Infraconstruction has successfully completed Port Infrastructure projects for some very
reputed clients like the Adani Group, Maersk India Pvt. Ltd., Gujarat Pipavav Port Ltd. (an A.P
Moller Group company) etc in the past. Going forward the scope for Port Infrastructure
development is going to be very large in India due to the underdevelopment of port facilities in
the country. It is quite likely that the Port developing companies would call upon Man’s
expertise to build newer Ports in the future as well. Moreover Man has been able to get
repetitive business from its customers which also show their confidence in Man Infra’s project
execution capabilities.
Faster Project Execution Capabilities compared to others
Due to the use of Maven Technology the company has been able to execute its projects at a
faster pace than its peers due to which it has been able to finish its orders before the estimated
time period. This has resulted in the company getting repeat orders from its clients.
Presence of Private Equity Funds in the company for past 2 years
2 Funds namely SA (I) Holdings Infrastructure Company Private Limited and Standard
Chartered Private Equity (Mauritius) Limited are holding 8.2% and 6.1% stakes in the company
respectively. Both these firms have appointed 1 Investor Director each on the company’s Board
of Directors. Both these PE firms have bought in their experience and helped the company in
improving its Execution capabilities.
Debt Free Status of the company
Man Infraconstruction has near Zero debt on its books. Since Company is engaged in the Port
Infrastructure Development, Residential & Township Development and Commercial projects it is
a positive sign that the company has not over-leveraged itself and has sufficient room to go for
raising higher Working Capital Loans, if the need arises, in the future as well as Long term
loans without bringing too much pressure on its Balance sheet.
Investment Risks
Heavy Dependence on Residential Segment
Man Infra is heavily depended on revenues from the Residential Segment (nearly 62% of
the Total Revenues in FY 10). Moreover major part of its order book (nearly 73% of Total
Order Book in FY 10) also consists of orders from the Residential Segment. Such
dependence on a single segment may prove to be very dangerous for the company if this
segment faces some slowdown in the future.
Competition from New and Existing Players
India’s Infrastructure needs have got attention from major national and international
players. It is very likely that Man would be facing tough competition particularly in the Port
Infrastructure segment from other established companies. Winning of contract bids (both
private as well as public) may just become that much more difficult.
Recommendations
At current price levels of Rs. 337 the company’s stock is trading at a P/E of 18.24 for FY
09-10. Going forward we expect the company to achieve an EPS of Rs. 26 in FY 10-11 and
an EPS of Rs. 35 in FY 11-12 provided that there is no equity dilution. So at Current Market
price of Rs. 337 forward P/E for the company comes out to be 12.98 and 9.61 for FY 11(E)
and FY 12(E) respectively.
Now taking a conservative P/E of 16 for both 2011 and 2012 and EPS (E) of 26 and 35 we
expect the stock to reach a price of nearly Rs. 416 and Rs. 560 by 2011 and 2012
respectively.
Disclaimer: The information being provided to you is compiled from sources we believe to be reliable. ANS Pvt. Ltd cannot and does not take any guarantees
about the accuracy, reliability, validity or timeliness of the information and/or data provided/made available to you in this document. The views are purely
indicative. Neither ANSPL nor any of its associates, subsidiaries, affiliates, directors, and/or officials become liable or have any kind of responsibility for any loss
or damage that you may incur from any decisions taken by you based on our recommendations. None of the information contained herein constitutes a
solicitation from ANSPL to Buy and/or Sell securities and/or any Future, Options or Other Financial Contracts. Clients may exercise their own caution and double
check or verify the information contained in our recommendations.