Desi Wall Street
Desi Wall Street

@desiwallstreet

18 Tweets 23 reads Mar 06, 2022
(1/n)
SPML Infra - A MULTIBAGGER in the making
A Detailed Thread on India's Leading Water Infra Co
🔄Do Retweet to Educate Investor Community
#StockMarket #StocksToTrade #StocksInFocus #StocksToBuy #stocks #Investment #investing
(2/n)
Mkt cap - 190cr
Book Value - 76
P/B - 0.67x
▫️SPML Infra Limited is a leading Infrastructure Development company with over 40 years experience in the public as well as private sector.
(3/n)
▫️Co undertakes tender based contract from government departments & has a pan-India presence with ongoing projects at Delhi, Uttar Pradesh, Rajasthan, Bihar, Gujarat, Maharashtra & Karnataka.
(4/n)
▫️Co has expertise in executing world class infrastructure for water treatment & transmission, waste water handling, treatment & recycling, solid waste management, power transmission & distribution & civil infrastructure development.
(5/n)
▫️Co has managed & implemented over 650 projects across India on an EPC (Engineering, Procurement and Construction), PPP (Public Private Partnership) and BOOT (Build-Own- Operate-Transfer) basis
(6/n)
Track Record & Milestones
▫️Among World’s Top 50 Private Water Management Companies
▫️650+ completed projects
▫️10000+ KM of cross country pipelines
▫️800000 households connected to electricity
▫️5000+ MLD of water pumping stations
▫️20000+ Villages Electrified
(7/n)
▫️2000+ Mild Water Treatment Plants
▫️1000+ Mild Sewage Treatment Plants
▫️1500+ kms of roads and highways
▫️500+ kms sewerage network
▫️500,000+ Smart water meters installed
(8/n)
▪️Co used to be a High Performer, subsequently fell into trouble due to 2000/2500cr receivables stuck in arbitration, Mounting Debt further added to woes & ac became NPA
▪️Working Capital Constraints further led to delays in Project Executions & Subsequently reported losses
(9/n)
▪️Now with Debt Restructuring in its Final Stages, a formal Approval is expected by the end of Feb'22
Co has already made a Turnaround in Q2FY22 & Debt Restructuring will help it Improve its performance further
(10/n)
▪️1573cr worth of Debt could be considered non-sustainable & payable over 14 years without Interest
▪️Annual Interest cost will be lower by 180-200cr
▪️1.3cr shares to be issued to lenders
▪️49cr Rights Issue will provide growth capital
(11/n)
Strong Q3 Performance
▪️Revenue at 250cr
▪️PAT at 2.5cr vs 25.4cr Loss YoY
▪️During FY21, Co has won orders worth 5770cr from the esteemed clients in the state of Odisha, Manipur, and Uttar Pradesh including several projects under the Jal Jeevan Mission
(12/n)
▪️Executing over 40 projects in water, power, irrigation and sanitation sectors
▪️ Q4 expected to be similar to Q3
Projections
FY23 Estimates
▪️Revenue of 1200cr
▪️EBITDA at 145cr
▪️Interest cost of 40cr
(13/n)
FY24 Estimates
▪️Revenue of 1800cr
▪️EBITDA at 215cr
▪️Interest cost of 40cr
FY25 Estimates
▪️Revenue of 2500cr
▪️EBITDA at 300cr
▪️Interest cost of 50cr
Co continues to bid for water projects aggressively for project tenders worth 20000cr with JV partners
(14/n)
Big Arbitration Awards
▪️Co has won Arbitration Awards worth 700cr in its favor
▪️310 cr already deposited in Escrow account
▪️Although these awards have been challenged in higher courts, we are pretty confident that co will win these Arbitrations in Higher courts as well
(15/n)
▪️Arbitration Awards itself are more than 3.5x current market cap
▪️Once co receives this money, co will have a Huge Growth Capital required for execution of its projects
(16/n)
Big Trigger to Provide Impetus to Earnings
▪️US$270 billion (₹18.5 trillion) is likely to be invested in water infrastructure over the coming 10 yrs, through programmes for piped water supply to all homes by 2024, river-linking, Namami Gange & PMKSY
(17/n)
▪️Nal Se Jal scheme is GOIs ambitious project to ensure every rural house gets piped water by 2024
Nal Se Jal alone will need ₹6.3 trillion in investment
▪️We expect co to win 5% of orders from different projects, which provides an Opportunity of ~93000cr over next 10 yrs
(18/n)
Cos financials will grow by Leaps & Bounds
Operational Performance will see a significant improvement
🎯 Currently available at a Mkt cap of Just 200cr which is extremely tiny for a co with such Bright Prospects
HUGE Potential for BIG MULTIBAGGER Returns

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