Feb 20, 2013, 03.34 PM | Source: Moneycontrol.com
Angel Broking is bullish on Sadbhav Engineering (SEL) and has recommended buy rating on the stock with a target of Rs 157 in its February 19, 2013 research report.
, Angel Broking |
“SEL reported a revenue decline of 51.3percent yoy to Rs353cr which was significantly below our and street estimate by 53percent and 40percent respectively. This was mainly on account of slower execution pace in the remaining under-construction projects and delay in start of construction activity in newly awarded projects. On the margin front, the company’s EBITDAM declined by 200bp yoy to 9.4percent against our estimate of 10.3percent. Interest cost grew by 28.2percent yoy/17.1percent qoq to Rs21cr and was in line with our estimate. On the bottom-line front, the company reported a PAT of Rs4cr (significantly below our estimate), a decline of 91.1percent yoy. This was mainly due to lower-than-expected revenue growth and higher interest expense during the quarter.”
“For FY2013, SEL has reiterated a muted performance on the revenue front. It expects two recently won BOT projects Gomti-ka-Chauraha and Solapur-Bijapur to contribute revenue from 1QFY2014. Given the poor performance in 9MFY2013, we have revised our FY2013 and FY2014 EPS estimates downwards to Rs3.2 (earlier estimate was of Rs7.2) and Rs7.2 (earlier estimate was of Rs8.2) respectively.”
“We continue to maintain our buy view on the stock with a SOTP target price of Rs157, owing to robust order backlog of Rs8,747cr (3.3x FY2012 revenue), strong balance sheet and as the company’s equity requirement for under-construction/development projects is expected to be met by internal accruals,” says Angel Broking research report.
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