>Punj Llyod(ANAND RATHI)

* Maintain Buy. Punj Lloyd has reported strong revenue and
earnings growth for 2QFY09. On the higher execution of
projects, it beat our as well as the street’s estimates. We maintain
our Buy rating.

* Robust revenue growth. Sales grew 54.5% yoy on the back of
higher execution of projects, mainly in the infrastructure (39% of
revenue) and process plants (34% of revenue) segments.

* Margin expansion. EBITDA margin for the quarter expanded
52bps yoy. Though the margin expansion came 41bps under our
estimate, the higher-than-estimated ‘other income’ more than
made up for the lower reported EBITDA margin.

* growth beats estimates. Punj reported a 61.1% yoy
increase in earnings growth, 17.3% more than estimated. The
growth was driven by higher revenues and margin expansion.

* Order backlog and valuations. Its order backlog stands at
Rs216.75bn; order inflows for the quarter were Rs56bn (a 170%
rise yoy). The company is not seeing any slowdown in order
inflows or project executions. We maintain our estimates. Our
revised target price of Rs217 implies a target PE of 11x our Sep’09
earnings estimate. It stands at a 35% discount to the market target
multiple for market leader L&T. The target price of Rs217 is well
supported by our sum-of-parts valuation of Rs237.

For full Report Punj Llyod(ANAND RATHI)