[stock_win_india] Vascon Engineers IPO Valuation

 

Hi,

There is an IPO valuation post in today's News updates in Indian stock market.

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So here the details on today's updates

• Vascon Engineers IPO Valuation

Strengths

...Strong and diverse EPC order backlog of Rs 3227.08 crore spread over 70 projects/ contracts as of December 31, 2009. Of the total order backlog, about 37.6% (or Rs 1214.74 crore in 47 projects) are third party contracts and the balance 62.4% are captive contracts from the realty business, amounting to Rs 2012.34 crore, spread over 23 projects.... - read more

Weaknesses

...The company's order backlog is largely made of fixed price contracts and, hence, any upward cost push in construction and input services will impact the margin affecting profitability.... read more

Valuation

In comparison, Sobha Developers quotes at a P/E of 25.9 times of its FY 2009 consolidated earning, and BL Kashyap quotes at a PE of 13.3 times of its FY 2009 consolidated earnings. Though the high margin and high realty business may give a push to the margin and profitability, the asking price seems steep compared to listed realty players as well as EPC service players of similar size.

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Abhijeet
Fellow Investor just like you in Stock Market
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