Concurrent Infrastructure

Shanavas…thank you for bringing this stock to notice. I researched Concurrent (India) Infrastructure (BSE: 531261) and it seems that the past 2 years has not been good for the company. But the future looks promising. In fact, that is an under-statement. This script can be a multi-bagger and multiply your investment by 3 times in the next 3 years. I think all powerfulpicks members should invest some money into this, even if it is as low as Rs 15000-20000.

CONCURRENT mainly operates in the infrastructure sector; however, it has diversified intelligently and inserted itself into lucrative segments like Logistics and power. The company is planning for a 520 Megawatt power plant in Andhra Pradesh. It has also bagged orders from Riyadh airport in Saudi Arabia for handling and maintenance under a joint venture with the prince of Dubai. This high margin vertical could contribute up to150 Cr top-line in the coming few years. CONCURRENT has a significant presence in construction of Hospitals, Roadways, commercial complexes, Erection, Material handling, Engineering and power generation projects viz. Thermal power, Hydro power and windmills.

The company has bagged EPC contract from Pennant Penguin Holdings in Kandy, Srilanka and has signed agreement with Ellis Richardson Inc (ERI) on an exclusive basis for Indian markets and on a non-exclusive basis for the overseas markets. The company had also bagged a sub-contract worth Rs 22crore from Sreenidhi Constructions, Belgaum, Karnataka. The contract involves execution of modernization of distributaries and lateral lining and rehabilitation of structures coming under Davangere branch canal (30 kilometer).

CONCURRENT skillfully passes the risk of order execution to sub-vendors, insulating it to some extent from risk of losses. It appears to be debt free, which is very rare in the infrastructure space.

Concurrent is very cheaply priced compared to other infrastructure players. Having an EPS of 2.63, its P/E works out to be 9.1 at present. Concurrent's EPS can easily go up to 8.5 in the next 3 years, lowering its P/E to 2.82 at CMP of 24. Even if we assume that Concurrent will not command premium valuation from the market and investors will tolerate a P/E of just 9, Concurrent can easily command a price of 75-76. At 24 per share, CONCURRENT thus looks a cheap and safe buy to me. Let us keep a modest medium term 10 month target of 38 (+58%) to start with. 

Disclosure:- I do not own this stock yet, but I may buy this script after sharing the recommendation with the group.