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Sell Indo Tech Trans, target of Rs 204: Emkay Global
Emkay Global Financial Services has maintained its sell rating on Indo Tech Transformers with a target of Rs 204. Indotech reported adjusted net profit of Rs 42 million, decline of 56% yoy in Q4FY09 - below estimates.
Emkay Global Financial Services has maintained its sell rating on Indo Tech Transformers with a target of Rs 204 in its May 20, 2009.
"Indotech reported adjusted net profit of Rs 42 million, decline of 56% yoy in Q4FY09 - below estimates. The operational performance was disappointing with 1030 bps yoy decline in EBITDA margins to 22.1% and EBITDA decline at 50% yoy to Rs 71 million. Revenue decline at 32% yoy to Rs 322 million was also below expectations - led by (1) volume decline of 7% and realization decline of 27%. The Q4FY09 realizations of Rs 0.50 million/MVA are 22% lower than the average FY09 realizations of Rs 0.65 million/MVA - indicating at pressure on realizations."
"We reduce our FY10E earnings estimates by 19% to Rs 34.0/Share and introduce FY11E earnings of Rs46.5/Share. At CMP of Rs 264, the stock is trading at 7.8x FY10E earnings and 1.5x FY10E Book Value. We maintain our 'SELL' rating and price target of Rs 204 based on 1 yr rolling fwd PER," says Emkay Global Financial Services' research report.
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To read the full report click on the attachment......
