CRISIL maintains fair value of Rs 15.8 to Jasch Industries

Jasch Industries Ltd’s (Jasch’s) Q1FY12 revenues were in line with CRISIL Research’s expectations but EBITDA margin was higher than expected. Improvement in margin was on account of higher contribution from the relatively better margin electronic gauge segment on the back of execution of the Arcelor Mittal’s order. The company’s board has recommended its first ever dividend of Re 1 per share. We will revisit our estimates post interaction with the management. We maintain the fundamental grade of 2/5.

Q1FY12 result analysis
• Q1FY12 revenues grew by 12% y-o-y but declined by 13% q-o-q to Rs 198 mn. The EGS segment’s revenue increased 92% y-o-y on account of the completion of Arcelor Mittal’s US$1.1mn order. The PU/PVC segment’s revenues decreased by 8% y-o-y due to lower demand. The q-o-q decline in the revenue is on account of seasonality.

• EBITDA margin improved 324 bps y-o-y to 13.0% due to better revenue mix and improvement in margins in both the EGS and the PU/PVC segments. EBIT margins increased y-o-y by 354 bps and 46 bps for the EGS and PU/PVC segments, respectively.

• PAT margin grew by 228 bps y-o-y and 82 bps q-o-q to 5.8% due to better operating performance and lower effective tax. PAT increased by 85% y-o-y and 1% q-o-q to Rs 11.4 mn.

• Jasch reported an EPS of Rs 1.01 for Q1FY12 compared to Re 1 in Q4FY11 and Rs 0.54 in Q1FY11.

• The company’s board has recommended a first ever dividend of Re 1 per share, yielding 5.6% on current share price.

Valuations: Current market price has downside
We continue to use the discounted cash flow method to value Jasch. We maintain our fair value of Rs 15.8 per share, says CRISIL Research report.

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"