Bajel Projects set for growth, says Antique; starts coverage with 'Buy'

Bajel Projects is on the cusp of a healthy growth trajectory, said the brokerage firm Antique Stock Broking as it initiated coverage on the engineering, procurement, and construction (EPC) company with a 'Buy' rating on the stock.

 

“Backed by favourable power transmission and distribution (T&D) capex tailwinds, sustained growth in order inflows and backlog, and a revamped management focus on execution discipline and cost control initiatives, Bajel Projects is on the cusp of a healthy growth trajectory,” wrote analysts Amit Shah and Rahulkumar Mishra in a research note.

 

The brokerage expects the company’s topline to clock a compound annual growth rate (CAGR) of 22 per cent over FY25 to FY28E. A strong 350 basis points expansion in earnings before interest, tax, depreciation, and amortisation (Ebitda) margins is likely to translate into a 124 per cent CAGR in profitability over the same period.

 

 

Antique has set a target price of ₹270 on Bajel Projects’ shares, valuing the stock at 18 times its FY28E earnings per share (EPS). At this, the company’s shares were seen trading at ₹176.63 per share, down 0.56 per cent from its previous close. The assigned target price by Antique implies a nearly 53 per cent upside from the current price.

Strategic demerger to unlock long-term value

According to the brokerage, the demerger of Bajaj Electricals’ power EPC business into Bajel Projects has resulted in a focused, pure-play power transmission and distribution EPC platform with a clear strategic intent. As a standalone listed entity, Bajel Projects benefits from sharper management focus, independent access to capital, and dedicated resource allocation to its core power infrastructure business.  ALSO READ | IRB Infra shares rise 2% on posting 12% increase in Dec toll revenue 

“This structural reset enhances execution discipline, strengthens market positioning, and provides a strong foundation for scalable growth and margin improvement over the medium term,” Antique said in its report.

From legacy headwinds to sustainable recovery

Having navigated multiple challenges during FY20 to FY24 in the aftermath of the Covid-19 pandemic, Bajel Projects dealt with execution-related issues such as changes in project scope and right-of-way (RoW) challenges, low-margin legacy orders, commodity price volatility, and stretched working capital due to delayed payments, Antique noted.

 

The brokerage believes the company’s strategic reset, marked by a shift in order mix towards higher-margin private and overseas projects, securing large-ticket orders with superior Ebitda profiles of around 9 to 10 per cent, cost-saving initiatives under Project Neev, effective hedging mechanisms, and financing optimisation, has positioned Bajel Projects for a strong turnaround.

 

With improving execution discipline, stronger order inflows, and an international scale-up, analysts believe the company is well-placed for a profitability-led growth trajectory.  ALSO READ | Choice initiates 'Buy' on Aurionpro; eyes strong order book, Vision 2030

RAASTA 2030 to drive the next phase of growth

Antique further highlighted that under its flagship program, RAASTA 2030, Bajel Projects has embarked on a transformational growth journey. Key focus areas, according to analysts, include prioritising high-voltage projects, undertaking complex projects to enhance execution capabilities, foraying into adjacent categories to broaden offerings, margin-led efficiency improvements, selective overseas expansion, and faster adoption of digital technologies.  ================ 

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