CRISIL Research has come out with its report on Sanghvi Forging & Engineering. According to the research firm, the company is expected to complete the stabilisation of the plant by Q3FY13 and to execute a few of the prototype orders.
CRISIL Research has come out with its report on Sanghvi Forging & Engineering . According to the research firm, the company is expected to complete the stabilisation of the plant by Q3FY13 and to execute a few of the prototype orders.
Sanghvi Forging and Engineering Ltd’s (Sanghvi’s) Q2FY13 revenues were below while PAT was above CRISIL Research’s expectations. Postponement of one of its client’s requirement led to lower-than-expected revenues while the execution of high-margin orders boosted profitability. The management expects to receive some orders in the last quarter of FY13 but they have informed that the scenario is weak. We have lowered our FY13 revenue estimate to factor in the slow execution of orders and have raised FY13 margin estimate to factor in the higher-than-expected profitability. Sanghvi has started the stabilisation of the heavy forging plant which is expected to take two-three months. Its capability to acquire approvals and subsequently bag orders is a key monitorable. We maintain the fundamental grade of 2/5, indicating that its fundamentals are ‘moderate’ relative to other listed securities in India.
Delay in order execution impacted sales but high-margin orders supported profitability
Capacity expansion of 15,000 tonnes per annum open die forging is on track
Valuations: Fair value maintained
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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