cts are linked to the WPI index. The balance 20 per cent contracts are on fixed-price terms. The falling commodities prices are thus good for the company.
Notably, the company has presence in different verticals of infrastructure segments such as power, marine, industrial, roads, railways, bridges, urban infrastructure and housing. Also, its recent foray into the mining, onshore drilling and power T&D segments, will prove to be the future growth drivers. This diverse portfolio provides comfort as it will also provide stability in the event of any slowdown in a particular segment or geography.
Again, the company’s order book of Rs 10,600 crore or 3.8 times its FY08 revenues provide strong revenue visibility. As per estimates, the company’s revenue should grow at 55 per cent in FY09 and 35 per cent in FY10. The stock is currently trading at 7.2 times the estimated FY09 earnings, which is also reasonable considering its historical (2004 to 2008) PE band of 5-25 times.
Long term investors canstart nibbling at these stocks as the valuations are very attractive currently. No doubt there might still be some pain left in the stock market but the road ahead does not look all that gloomy. The nation needs to construct and develop and the momentum will be back sooner than most experts predict.
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