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Mir Akhter Hossain Ltd back with a bang

Talukder Farhad
14 Oct 2021 00:00:00 | Update: 14 Oct 2021 02:23:17
Mir Akhter Hossain Ltd back with a bang

Mir Akhter Hossain Ltd, one of the largest and oldest constructions and engineering firms in the country, is expected to record healthy revenues in days to come as it has been implanting a handful of projects, according to an analysis.

As many as 37 public and private sector projects are under its arm. The projects included Osmani International Airport expansion, Bakkhali River Bridge construction, JICA Access Road Package-3.3, and Jamuna River dredging.

However, it has some downside risks such as rising infrastructure equipment prices in the world market. “So higher import cost might be a risk factor for the company,” said EBL Securities.

Mir Akhter Hossain Managing Director Mir Nasir Hossain admitted that the construction industry has some challenges.

“One of the biggest challenges is to make price adjustments during the ongoing projects,” he said.

“At present, the prices of stones, rods, cement, and other construction materials, and transportation costs have been rising. Many companies may face losses if the government does not make adjust prices of the ongoing projects,” he said.

The EBL Securities said Mir Akhtar could be at risk if there are any cuts in the government's annual development programme, because the company is implementing many government projects.

The total value of its ongoing projects is Tk 5,865 crore. “As a result, the company will be able to generate significant top-line revenue in the upcoming financial years,” said the EBL.

In 2021, the company is expected to complete ten projects worth Tk 2328 crore, it said.

New investment plans also help generate more revenue for the company as it has planned to invest Tk 81.5 crore in the new projects, it added.

After completion of the new projects, its revenue is expected to increase to Tk 1,60.5 crore and net profit to stand at Tk 22 crore, which will help boost its EPS (earnings per share) by an additional Tk 1.83, said the EBL.

In FY20, the company’s profit stood at Tk 37.5 crore, which was not healthy as per the company’s reputation, but bounced back in the first nine months of fiscal FY21 when it was Tk 49.4 crore.

Loan payment will also have a good impact on the company’s balance sheet in the upcoming days, said the EBL.

It has paid Tk 40 crore of its long-term loan from the IPO fund.

Mir Akhter business growth is heavily correlated with macroeconomic conditions. Any change in macroeconomic conditions will always directly impact the company.

The government’s budget allocation for Annual Development Programme is another important indicator of its business growth. As a result, the company’s revenue and profit growth can witness volatility.

Mir Akhter imports a large chunk of its raw materials and any price fluctuation in the foreign market will adversely impact its business. Also, the company is exposed to high-interest risk due to its high exposure to debt capital.

The company’s net profit margin has decreased from 6.07 per cent in 2016-17 to 4.06 per cent in 2020-21 (July-March) primarily due to an increase in financial expense and tax provision.

Abdul Monem, Max Infrastructure, Toma Group, Spectra Construction, Monico, and Project Builders are its competitors.

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