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Reduce Sintex Industries; target of Rs 66: Dolat Capital
Dolat Capital is bearish on Sintex Industries and has recommended reduce rating on the stock with a target of Rs 66 in its January 16, 2012 research report.
Dolat Capital is bearish on Sintex Industries and has recommended reduce rating on the stock with a target of Rs 66 in its January 16, 2012 research report.
"Sintex's revenues were much below our estimates down 2% at Rs 11.58bn in Q3FY12 as compared to Rs 11.84bn registered in the corresponding quarter of the previous year. This was largely attributed to the sudden slowdown in the monolithic segment (on account of political logjam) & custom moulding segment (particularly led by the performance of the overseas subsidiaries)."
"EBIDTA margins contract: Slower execution of monolithic projects (higher working capital requirements) & slowdown in the custom mouldings segment resulted in the operating margin witnessing a 250bps contraction to 14.1% in Q3FY12 from 16.6% in Q3FY11."
"Reported PAT was down 27% to Rs 822mn as compared to Rs 1.13bn recorded in Q3FY11. However the PAT would have been much lower than reported had they not adopted the option of amortisation of MTM losses on the FCCBs over the remaining quarters till the maturity of these FCCBs (as recommended in paragraph 46A of AS-11 inserted by notification dated 29th December, 2011)."
"We have also cut down on the EV/EBIDTA multiples to factor in the earnings moderation as well as the mop up in the corporate governance issues. We maintain a "Reduce" rating on the stock with a price target of Rs 66, reflecting a downside of 7% from current levels," says Dolat Capital research report.
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