We recently interacted with the management of Punj Lloyd to understand the progress on delayed orders as well as court case related to SABIC Petrochemicals.
While decision on court case pertaining to SABIC Petrochemicals is expected to come by third week of April, other delayed orders have made some progress. Project worth Rs18 billion related to Integrated Condensate Splitter Aromatics Complex at Jurong Island, Singapore may face cancellation.
We revise our operating margin assumptions downwards for FY10 to factor in the above-mentioned delays and revise our price target to Rs158 (Rs189 earlier) on FY10 estimates.
We continue to maintain our ACCUMULATE rating on the stock till the time issues related to SABIC petrochemicals and other project delays are resolved.