CRISIL maintains fundamental grade of 4/5 to Era Infra Engg

3791 Investors following Era Infra Eng. Share this News with them.

0

Like this story, share it with millions of investors on M3

CRISIL maintains fundamental grade of 4/5 to Era Infra Engg

CRISIL Research has come out with its report on Era Infra Engineering. The research firm has assigned a valuation grade of 5/5 to the company and maintained the fair value of Rs 219 per share, in its August 15, 2011 report.

Post your opinion here

 

0

Tweet

Share on Tumblr

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 assigned a valuation grade of 5/5 to the company and maintained the fair value of Rs 219 per share, in its August 15, 2011 report.

Era Infra Engineering Ltd's (Era's) Q1FY12 results were below CRISIL Research's expectations. While revenue growth was tepid at 7.3% y-o-y, earnings de-grew by ~13% following a decline in EBITDA margin and higher interest cost. Slowdown in order intake in the past few quarters and execution hurdles impacted revenue growth. Lack of new orders leading to declining revenue visibility is a concern and remains a key monitorable. We may revisit our estimates post interaction with the management. Given Era's diversified order book with presence across roads, power, industrial and social infrastructure, and prequalification for orders worth ~Rs 30 bn, we maintain our fundamental grade of 4/5.

Q1FY12 standalone result analysis
• Revenues grew by 7.3% y-o-y (down 26.6% q-o-q) to Rs 8,735 mn. The contracting business, which contributed 91% to the top line, grew ~6.2% y-o-y (down 28.3% q-o-q) to Rs 8,127.

• EBITDA margin declined by ~100 bps y-o-y (up 517 bps q-o-q) due to an increase in raw material costs and higher employee expenses.

• PAT de-grew by ~13% y-o-y (down ~25% q-o-q) to Rs 514 mn on lower EBITDA margin and more than proportionate increase in interest expenses. PAT margin declined by 137 bps y-o-y (up 12 bps q-o-q) to 5.9%. EPS for Q1FY12 was Rs 2.8 vs. Rs 3.2 in Q1FY11.

Valuations: Current market price has strong upside
We continue to value Era based on the sum-of-the-parts method. The contracting business has been valued at Rs 161 per share, and the BOT projects are valued at Rs 58 per share based on discounted cash flow. This translates into a fair value of Rs 219 per share. Given the current market price, our valuation grade is 5/5, 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"

To read the full report click on the attachment