PSP Projects Q1 Results Review - Guidance Lowered For FY25: IDBI Capital

IDBI Capital Report

PSP Projects Ltd.'s Q1 FY25 profit after tax came above the consensus estimates by 20%. This is due to strong execution but the margins were impacted due to increase in expenses in UP projects.

PSP expects margins to be in range of 10-11% for FY25E/FY26E, and expects decrease in revenue growth by 2% at 13% for FY25E (earlier 15%).This has made us to cut the EPS and target price is revised to Rs 732.We value PSP at 15 times PER and retain our rating to Hold.

Order book stands at Rs 59 billion (i.e 2.6 times trailing twelve months revenue), and PSP plans to expand in various other states apart from Gujarat and has also bidded for orders in different states.

PSP has guided capex of Rs 600 million for FY25E, which also includes capex to ramp up precast facility. Stock catalyst remains execution and stability in the margin.

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