CRISIL assigns fundamental grade of 2/5 to Dolphin Offshore

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CRISIL assigns fundamental grade of 2/5 to Dolphin Offshore

CRISIL Research has come out with its report on Dolphin Offshore Enterprises (India). The research firm has maintained a fair value of Rs 122 per share to the company in its January 19, 2012 report.

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CRISIL Research has come out with its report on Dolphin Offshore Enterprises (India) . The research firm has maintained a fair value of Rs 122 per share to the company in its January 19, 2012 report.

Dolphin Offshore Enterprises (India) Ltd's (Dolphin's) Q3FY12 consolidated revenues were marginally below CRISIL Research's expectations, while operating profitability and PAT were significantly below. We believe that the continued underperformance of its Mauritian subsidiary could have hampered Dolphin's profitability. We will be lowering our estimates post interaction with the management. We maintain our fundamental grade of 2/5.

Q3FY12 result analysis
• Lack of EPC orders and increased competition has led to a significant decline in Dolphin's Q3FY12 standalone and consolidated revenues, which
fell by 38% and 26.8%, respectively, y-o-y.

• Higher cost of raw materials has more than offset the decline in other expenses and led to a decline in the company's standalone operating profitability. EBITDA margin declined by 233 bps y-o-y to 15.5%. This coupled with lower sales reduced standalone EBITDA by 46% y-o-y to Rs
66 mn.

• Further, high interest costs on a standalone basis and deteriorating profitability of its subsidiary have led Dolphin's consolidated net profits into the red y-o-y.

• The company reported a consolidated net loss of Rs 8 mn against a net profit of Rs 38 mn in Q3FY11.

Valuation: Current market price has strong upside
We continue to use price-to-book value multiple approach to value Dolphin. We maintain our fair value estimate at Rs 122 per share. At the current market price of Rs 88, the valuation grade is 5/5.

To read the full report click on the attachment

Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report.  The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

© CRISIL Limited . All Rights Reserved. Published under permission from CRISIL"