CRISIL retains valuation grade of 4/5 to Era Infra

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CRISIL retains valuation grade of 4/5 to Era Infra

CRISIL Research has come out with its report on Era Infra Engineering. The research firm has maintained the fundamental grade of 4/5 to the company in its November 14, 2011 report.

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Era Infra Eng BSE | NSE 30/05/12 Are Mutual Funds betting on Era Infra Eng?

CRISIL Research has come out with its report on Era Infra Engineering . The research firm has maintained the fundamental grade of 4/5 to the company in its November 14, 2011 report.

Era Infra Engineering Ltd's (Era's) Q2FY12 results were in line with CRISIL Research's expectations. Though revenue growth of 10% y-o-y was lower than expectations, EBITDA margins of 21.6%, surprised positively. Earnings (adjusted for forex loss), declined 17% y-o-y on higher interest costs and was in line with our estimates. We may revisit our estimates after interaction with the management. We maintain the fundamental grade of 4/5.

Q2FY12 standalone result analysis
• Revenues grew 10.1% y-o-y (up 2% q-o-q) to Rs 8,921 mn driven by execution of the current order book and ~7% contribution from the trading segment compared to nil in Q2FY11.

• EBITDA margin declined slightly by 57 bps y-o-y and remained healthy at 21.6% due to increase in raw material costs. On q-o-q basis, EBITDA margins improved 133 bps.

• Decline in EBITDA margin and higher interest cost led to 16.9% y-o-y decline in PAT (adjusted for forex loss of Rs 266 mn) to Rs 513 mn. PAT margin declined 187 bps y-o-y and 13 bps q-o-q to 5.8%. EPS was reported at Rs 2.8 vs. Rs 3.4 in Q2FY11.

Valuations: Current market price has upside
We continue to value Era based on the sum-of-the-parts method and arrive at a fair value of Rs 170 per share. Given the current market price, we retain the valuation grade of 4/5.

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.

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