CRISIL Research has come out with its report on Sangam (India). The research firm have revised their earnings estimates, rolled forward the discounting year to FY15 and revised the fair value to Rs 73 from Rs 58 per share.
CRISIL Research has come out with its report on Sangam (India) . The research firm have revised their earnings estimates, rolled forward the discounting year to FY15 and revised the fair value to Rs 73 from Rs 58 per share.
Sangam (India) Ltd's (Sangam's) Q3FY13 results were below CRISIL Research's expectations. Revenues decreased by 14.6% q-o-q (up 6.2% y-o-y) to Rs 3,295 mn due to 7.1% q-o-q dip in textile revenues and absence of revenues from the toll collection business. Sangam held collection rights from National Highway Authority of India (NHAI) to collect toll from toll centers in Rajasthan, Gujarat and JNPT, Mumbai. The toll collection contracts ended in Q2FY13.
EBITDA margin contracted by 20 bps q-o-q (up 554 bps y-o-y) to 15.6% due to lower contribution from the high-margin denim segment; the decline was partially offset by the absence of the low-margin toll collection business. Interest cost increased by 7% q-o-q due to higher utilisation of working capital limits compared to the previous quarter. Adjusted PAT declined by 39% q-o-q to Rs 111 mn and PAT margin contracted by 133 bps q-o-q to 3.4%. We maintain the fundamental grade of 3/5.
Textile revenues down 7.1% q-o-q due to lower demand
Lower contribution from denim segment weighed on textile EBIT
Fair value revised to Rs 73
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