Punj Lloyd – Recurring PAT 41% + Strong Order Book

Punj Lloyd’s 1QFY10 PAT at Rs1272mn up 30% YoY was 41% ahead of CIRA estimates of Rs902mn on better-than-expected margin expansion of 188bps v/s CIRA expectations of +51bps.

The company booked Rs99.4bn of orders in 1QFY10 taking the order backlog to Rs279bn up 38% YoY v/s CIRA expectations of Rs275bn. Execution was in line with expectations with sales of Rs29.5bn, which was more or less in line with CIRA expectations of Rs29.1bn

On June 30, 2009, the order for integrated condensate splitter aromatics complex at Jurong Island, Singapore by Jurong Aromatics is awaiting financial closure. The principal is presently exploring the possibility of relocating the project to a location where costs are lower. Should this not materialize, the company will omit the order from its order book.

Punj Lloyd is expected to report an EPS of Rs 13 for FY 09 and Rs 17 for FY10. The stock has gained fancy with the entry of Syndicate Fund Manager – Rakesh Jhunjunwala. BUY on Weakness.