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[Lavanay]

Every one on the street is talking of the company that they say is an L&T in the making. We are talking of Punj Lloyd.

The company does seem to be going everywhere, L&T seems tobe going- real estate and ship building.That the company is thinking big can be seeen from the fact that it’s going in for a $300-million qualified institutional placement at a 25-30% premium against the current price of Rs425.

Besides this, there is talk that the company is likely to get new orders in the region of $1billion. And if that were to happen,then it would be a multy bagger.It has already made to back to back announcements in two days- the first being its decision to acquire 25% in Pipav port and the second being is the real estate foray through a JV with Ramaprastha group. The JV will jointly develop close to 29 acres of land near Ghaziabad. Given the speed and aggression that Punj is showing its hardly surprising that the company is looking to raise such huge sum of money with the placement expected to go through in two tranches.

The basic and diluted EPS for FY07 stood at Rs 7.44 and Rs 6.91 respectively for Rs 2 paid up share. Current PE around 40, pls check latest financials at the company website. Highlights taken from June 2007 Qtr:

1. Consolidated income - 1417.95 crores - increase of 72% on Q-o-Q
2. COnsolidated EBITDA - 144.41 crores - increase of 104% on Q-o-Q
3. Net Profit - 59.47 crores - increase of 126% on Q-o-Q
4. Incorporated 2 Subsidaries Punj Lloyd Upstream Ltd and Punj Lloyd Infrastructure Ltd on April 4 2007
5. Company has also acquired 100% stake in Punj Lloyd Aviation Pvt Ltd
6. Buys 88% In Sembcorp Arm

Company into

Onshore & Offshore Pipelines
Cyrogenic tanks & terminals
Infrastructure Services
Process Planks
Turnkey Telecom Services
Engineering Services
Plant & Facility Management
Power
Broadband Services

New Initiatives

Real Estate
Construction of Deep Sea Ports
Alternate Energy (Wind)
Nuclear Plants With GE & Westinghouse

Presence in more than 35 countries. Present book Order 16480 crores+

This is not a Buy Call.  Please consult your financial adviser before buying any stock

[Lavanay]

Remarks from Sharekhan

@ Punj Llyod Ltd (PLL) is the second largest EPC player in the country with a global presence. We believe PLL
with SEC and Simon Carves is well-integrated and poised to tap the global opportunity available in hydrocarbons
and infrastructure sectors.
# PLL has witnessed a five-fold increase in its average order size from $30 million to about $130-140 million. This
move-up on the value chain has made PLL more competitive in executing larger and complex orders.
@ We expect the spectacular order flow to continue for PLL. The current order book of Rs18,484 crore is 3.6x
its FY2007 sales and imparts strong visibility. We expect PLL?s consolidated revenues and profits to grow at a
compounded annual growth rate (CAGR) of 36.9% and 55.1% respectively over FY2007-10E.
@ We recommend a Buy on the stock with a price target of Rs620. At the current market price the stock trades
at 54.4x and 34.2x its FY2008E and FY2009E fully diluted earnings per share (EPS) respectively.