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May 17, 2011, 02.58 PM IST
Unicon Investment is bullish on Diamond Power Infrastructure and has recommended buy rating on the stock with a target of Rs 234 in its May 16, 2011 research report.
“Diamond Power Infrastructure Ltd (DPIL) reported revenue of INR 3,424 mn for the quarter, up 16%, YoY. Revenue for FY11 was INR 14,525 mn, up 69%, YoY. Revenues were driven primarily by additional capacity coming online in FY11. As a percentage of total revenues, EPC business stood at 28%, cables 28%, conductors 30%, transformers 14%. EBITDA for the quarter was INR 467 mn, up 20%, YoY. EBITDA margin for the quarter improved by 43 bps, YoY. EBITDA for FY11 increased by 72%, YoY to INR 2,008 mn. EBITDA margin for the year saw a 25 bps improvement over the previous year to 13.8%. EBITDA was inline with Unicon estimates.”
“PAT for the quarter increased by 18%, YoY to INR 263 mn. PAT margin saw a marginal improvement of 13 bps over the same quarter previous year. PAT for the year improved substantially by 85%, over the previous year to INR 1,146 mn. PAT margin for the year increased by 68 bps to 7.9%. Order book position as on Q4FY11 stands at INR 14,000 mn which is 0.84x our FY12 revenue estimates. Order inflow for the quarter was ~INR 2,600 mn.”
“DPIL signed a MoU with Utkal Galavanizers Ltd in Apr 2011 to acquire a strategic stake in the company. Utkal Galvanizers is closely associated with the power sector for Extra High Voltage Power Transmission, right from the concept of design to commissioning of EHV Towers, substations and other lattice structures. Utkal Galvanizers is an approved vendor and an EPC contractor of Power Grid Corporation of India Ltd. for various EHV Transmission products. With the strategic stake in Utkal, Diamond Power’s foray in Transmission and Extra High Voltage segment will get a boost and the company would be able to leverage its presence by serving all segments of the T&D Industry. At CMP the stock trades at 5.6x our FY12 earnings estimate. We revise our target price and lower our FY12 EPS estimates by 8% in view of higher raw material and interest costs. We maintain Buy with a target price of INR 234,” says Unicon Investment research report.
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