CRISIL maintains fair value of Rs 122 for Dolphin Offshore

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CRISIL maintains fair value of Rs 122 for Dolphin Offshore

CRISIL Research has come out with its report on Dolphin Offshore. The research firm has maintained the fundamental grade of 2/5, in its October 19, 2011 report.

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CRISIL Research has come out with its report on Dolphin Offshore . The research firm has maintained the fundamental grade of 2/5, in its October 19, 2011 report.

Dolphin Offshore Ltd's (Dolphin's) Q2FY12 revenues underperformed CRISIL Research's expectations, while operating profitability and PAT were better than expected. While Q2FY12 was expected to be a lean quarter due to low EPC activity and lean season owing to monsoons, performance was lower than anticipated. Although our overall outlook for the rest of FY12 and for FY13 will likely remain subdued due to poor visibility on the company's EPC order book and uncertainty of change order claims, we may revise our estimates post interaction with the management. We maintain our fundamental grade of 2/5.

Q2FY12 result analysis
• Dolphin's Q2FY12 revenues declined by 29.5% y-o-y to Rs 343 mn from Rs 692 mn as the company's EPC business remained subdued. Dolphin's performance in the corresponding period last year was driven largely by receipt of claim amount raised for additional EPC work done in the earlier quarters.

• EBITDA margin was a healthy 20.3%, and was stable q-o-q. In Q2FY11, claim recovery had led to abnormally high EBITDA margin of 48.2%.

• The company reported PAT of Rs 14 mn against Rs 178 mn in Q2FY11. Accordingly, EPS was Rs 0.8 vis-a-vis Rs 11.3 in Q2FY11.

Valuation: Current market price is aligned
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 119, the valuation grade is 3/5.

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"

To read the full report click on the attachment