Fundamental Analysis Of Man InfraConstruction: The real estate industry is always expanding as a result of rising wealth, population, and demand. These real estate companies put the designs of buildings on a sheet of paper into reality. In this article, we are going to fundamentally analyze one such company that has been in this industry for more than 50 years. Read this article to learn about the company and its financials.

In this Fundamental Analysis of Man InfraConstruction, we will analyze the 50+ years old company, its financials, future plans and more.

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Fundamental Analysis of Man InfraConstruction

Man InfraConstruction Logo

About The Company

Incorporated in 1964, Man Infraconstruction Limited has 50+ years of experience in building landmark projects like ports, infrastructure, residential townships, commercial projects, institutions, IT projects, and futuristic lifestyle houses. The company is in the business of engineering, procurement, and construction (EPC) and asset ownership/real estate.

Various development and redevelopment projects are also being executed by the company in and around Mumbai & Pune. MICL has diversified into newer areas of engineering and has a goal of redefining the “luxury lifestyle” as per global standards.

The giant clients of the company include TATA, Airtel, Adani Group, Godrej, Century Ply, and many others. As of March 31, 2023, MICL has delivered 50+ projects and developed more than 240 hectares of port infrastructure & more than 8.5 million sq ft of residential development.

The EPC or construction division of MICL has delivered over 50 million sq. ft. of construction across India. Their real estate portfolio comprises around 2.0 million square feet of carpet area for ongoing projects and 2.6 million square feet of carpet area for upcoming projects and those in the pipeline. Out of the total revenue in FY23, 51% was contributed by EPC, and 49% was contributed by real estate.

Industry Overview

The Indian economy has grown from the 10th to the 5th largest in the world in the last nine years and is set to be the third largest by 2027–28. India is projected as the fastest-growing economy in the world by multiple agencies worldwide, and this growth has been due to an increase in private consumption and a significant increase in capital expenditure (CAPEX) by the government.

India’s GDP growth is predicted to grow in FY24, supported by the government’s infrastructure-led growth model, with an emphasis on transportation, housing, logistics, and last-mile connectivity.

According to NITI Aayog, the Indian real estate sector is anticipated to be worth $1 trillion by 2030, up from $200 billion in 2021, and will account for 13% of India’s GDP by 2025. A rate hike by the RBI may impact demand in the short to medium term, but the strong fundamentals of the economy, positive consumer sentiments, and continued aspiration for homeownership will drive growth in the real estate sector in the medium to long term.

Man InfraConstructionFinancials

Revenue And Profit

The financial statement of the company indicates that revenue has increased by 96.6 percent from ₹ 961 crores to ₹ 1890 crores from FY22 to FY23, respectively. On a 4-year CAGR basis, the company grew by 50.24 percent. The significant increase in revenue was mainly due to revenue recognition from multiple ongoing and completed real estate development projects and an increase in revenue from construction contracts.

Though revenues have increased, the net profits of the company have decreased by 3 percent, from ₹299 crore in FY22 to ₹289 crore in FY23. On a 4-year CAGR basis, the company has grown by 61.01 percent.

The loss in FY20 was mainly due to the decrease in revenues, the decline in dividend income from subsidiaries, and the loss of associates.

Fiscal YearRevenue from operations (In Crores)Net Profit (In Crores)
20231,890.35288.96
2022961.48298.52
2021427.1633.34
2020266.98-12.23
2019371.3642.56
4-year CAGR50.24%61.01%

Profit Margins

MICL reported a 3.84 percent fall in operating profit margin (OPM) and a 15.76 percent fall in net profit margin (NPM) from FY22 to FY23. The fall was consistent with the net profits. Though there has been a fall in profit margins, the margins were able to beat the 5-year average of 19.64 percent and 10.95 percent, respectively.

The fall in margins was due to an increase in the cost of material consumed and lower margins in certain projects.

Fiscal YearOperating Profit MarginNet Profit Margin
202321.90%15.29%
202225.74%31.05%
202122.61%7.52%
20200.88%-6.49%
201927.05%7.40%
5-year average19.64%10.95%

Return Ratios

Return on Capital Employed faced a slight fall of 0.33% from 33.92% in FY22 to 33.59% in FY23, but considering the 5-year trend, the RoCE has increased by almost 21%. On a 5-year average basis, ROCE stands at 18.01%.

Return on Equity reported a 9.26% fall from 38.91% in FY22 to 29.65% in FY23. Considering a longer perspective, RoE has almost increased by 25%. On a 5-year average basis, RoE stands at 15%. The fall was due to a decrease in the margins.

Fiscal YearRoCERoE
202333.59%29.65%
202233.92%38.91%
20219.96%4.78%
20201.60%-2.54%
201910.99%3.98%
5-year average18.01%15.00%

Debt Analysis

Looking at the company’s leverage ratio, we can see that it has maintained a debt-to-equity ratio of less than 0.8 for the past five years. This indicates that the company is relying less on borrowed capital for financing its business and can retain more of its revenue. The present debt-to-equity ratio stands at 0.19 times, compared to 0.65 times in FY22, due to the repayment of borrowings.

The company’s interest coverage ratio has strengthened in recent times, with ICR standing at 7.79 times in FY23 and a 5-year average of 3.89. This indicates that the company has the ability to pay its interest easily. 

The company has the potential to acquire extra funds when required.

Fiscal YearDebt / Equity (Times)Interest Coverage Ratio (Times)
20230.197.79
20220.657.13
20210.751.92
20200.60.31
20190.652.3
5-year average0.573.89

Fundamental Analysis of Man InfraConstruction – Key Metrics

ParticularsAmountParticularsAmount
CMP212.9Market Cap(Cr)7,712.73
EPS8.58Stock P/E17.62
RoE29.65%RoCE33.59%
Promoter Holdings67.15%FII Holdings3.72%
Debt to Equity0.19P/B4.6
Operating Profit Margin21.90%Net Profit Margin15.29%

Future Plans

  • To focus on growth in the MMR region through the Asset Light model (JV, JDA, and DM).
  • To expand their footprint in the demand-generating market in Miami, Florida, USA.
  • Form strategic tie-ups with local partners (Location Ventures) and reputed brand partners (Marriott Group) in the USA.
  • Launch of new real estate projects to further strengthen the order book.

Conclusion

As we conclude this article on “Fundamental Analysis of Man InfraConstruction,” we have understood its business, analyzed its performance over the last 5 years, and looked at the key matrices. However, further analysis to understand the risk & return characteristics and suitability before investing is necessary. What do you think about this company? Let us know in the comments section below.

Written By Ashish Agarwal

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