MEP infrastructure Development - Technically Strong

MEP infrastructure Development
(cmp 112)

Market cap 1755 Cr
Face value 10

Company Overview :- 

• Fundamental function of MEP Infra is toll collection, operation and maintenance of road infrastructure assets. 

• Company focus on pure short-term and long-term Toll Collection and OMT projects. We have extended our experience to BOT and OMT projects and construction of bridges.

• Along with subsidiaries, MEP INFRA has 95 completed projects  across India – many of them first of a kind – in 12 states, including an aggregate of 182 toll plazas and 1086 lanes.

• Undertake toll collection at the Rajiv Gandhi Sea Link project, Mumbai since its opening in 2009. Also collect toll at five of Mumbai’s entry points.

Financials :-

• Company posted Turnaround result FY16, and Sharp Four Fold jump in PAT at 108.93 Crin FY17 vs 26.33 Cr. in FY16.

• Company continuously reducing debt and increasing Assets.

Negative :- 

- Stock is trading at 318.98 times its book value

- Company has low interest coverage ratio.

- The company has delivered a poor growth of 9.87% over past five years.

- Contingent liabilities of Rs.2852.11 Cr.

- Promoters have pledged 35.61% of their holding.

- Higher valuation compared to peers.

Recent Development :-

• The company has received the letter of acceptance (LOA) from National Highways Authority of India (NHAI) informing that MEP has been engaged as 'user fee collection Agency on the basis of Competitive Bidding through e-tender for Chennasamudram fee plaza of NH-4, in the state of Tamil Nadu,"

• Expect Revenues Of Around Rs 84-85 Cr From New Toll Project.

• MEP Infrastructure Developers Ltd has won an Operate, Maintain & Transfer (OMT) concessionaire for the maintenance and collection of toll at Rajiv Gandhi Sea Link for Rs 325.08 crore.

• The Rajiv Gandhi Sea Link project is a 5.6-km long, eight-lane carriageway in Mumbai city.

• Road toll management company MEP Infrastructure Developers Ltd is in talks with South Korean, Chinese and Japanese infrastructure companies to form joint ventures to bid for road projects under the hybrid annuity model (HAM) in India.

• New vehicles to have RFID tag for toll payments. Is big positive for the company. 

• So, as far as toll plazas are concerned, the ministry of road, transport and highways is advising vehicle manufacturers that in all new vehicles, the manufacturers must provide Radio-Frequency Identification (RFID) facility.

• The provision of Electronics Product Code Global Incorporated (EPCG)-compliant RFID facility in all new vehicles will ensure payment of toll digitally and also avoid the waiting time, and the vehicles will move seamlessly without having to wait at check posts. “This will improve the functioning of toll plaza, digital payments,”. 

Technicals :- 

• Stock is technically strong.
• RSI positive.
• Moving above 10,50,100 SMA.
• PSAR and Supertrend Positive.
• Today stock made Ascending triangle breakout.

Verdict :- 

• Technically stock is bullish, one can see target of 120,125 within short term with 105 as Stop loss.
• By seeing fundamentals and pledging of shares, I can't suggest to hold for long term as investment stock.
• One can ride with the tide and encash technical breakout.

Happy Investing

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NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION  BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN. 

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