Buy Jyoti Structures; target Rs 50: KRChoksey
KRChoksey is bullish on Jyoti Structures (JSL) and has recommended buy rating on the stock with a target price of Rs 50 in its February 04, 2013 research report.
February 12, 2013 / 16:47 IST
KRChoksey is bullish on Jyoti Structures (JSL) and has recommended buy rating on the stock with a target price of Rs 50 in its February 04, 2013 research report.
"Jyoti Structures (JSL) sales increased by 5.5% YoY to Rs. 619.7 cr, in line with our expectation. Operating margins remained flat 10.1%. Interest cost increased in line with our expectation by 9.7% to Rs. 38.3 cr on account of stretch working capital. Consequently PAT declined by 2.3% to Rs. 13.4 cr. Company registered order inflow worth Rs 433 cr. Consequently Order backlog stands at Rs. 4605 cr as of Q3FY13.For 9M FY13, JSL has registered flat growth of 0.6%. Transmission constituted 87% of the revenues booked followed by Rural electrification 6.5% and substations 6.5%. Domestic revenues constituted 88% while Export constituted remaining 12%.Issues related to ROW, other clearances and delay in payments from customers have been impacting sales growth. However, management has guided a strong execution in Q4FY13, as it has received clearances related to few projects. The company expects to end FY13 with a top line of approx Rs 2,800 cr. For FY14, it has guided for a sales turnover of Rs 3,300 to Rs 3,400 cr.Borrowings as of Q3FY13 stood at Rs 870 cr and Letter of credit at Rs 680 cr. Debtor days remained high at 228 days. Almost Rs. 400 cr of recoveries are pending beyond comfort zone. Payment from utilities like Maharashtra (Rs.250 cr), Rajasthan (Rs. 58 cr), TN (Rs. 65 cr) have accentuated debtors outstanding. The company is focusing on recoveries of dues and has targeted to bring debtors days down by 20 to 30 days over next 6 months.JSL registered order flows worth Rs. 433 cr. Orders from Kenya, Nigeria contributed to order inflows. For 9MFY13 order inflows stand at Rs. 2164 cr vs Rs. 1681 cr in 9MFY12. Focus on international orders have contributed to growth in order inflow over 9M. Current order backlog stands at Rs. 4600 cr, ~ 1.8x TTM sales, giving visibility for next 18 months.Valuations & Views: At CMP of Rs. 42, JSL is trading at a P/E of 5.3 x its FY13E earnings and 3.8 x its FY14E. We expect execution to pick up in Q4, the company is also expanding in international market for new orders. Considering the same and attractive valuations JSL is trading at we maintain our target price of Rs 50 and recommend a BUY on the stock," says KRChoksey research report.Institutional holding more than 40% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.To read the full report click on the attachment 
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