"Sadbhav Engineering, Q1FY15 EBITDA at Rs715 mn +24% YoY (vs estimate of Rs748 mn) as margin edged lower at 10.4%+17 bps versus expectation of 10.9%
Revenue came in at Rs6.85 bn +22% YoY tad higher than our expectation of Rs6.77 bn led by road (BOT) segment and Mining segment. Revenue from cash contracts declined by 27% led by slower execution of other cash contracts
Net profit came in at Rs270 mn +67% YoY against our expectation of Rs298 mn. Higher capital cost (depreciation edged higher by 126% YoY, 5% QoQ ) partially offset by lower tax rate of 7% against our expectation of 25%
Well placed to fund equity requirement of Rs3bn for BOT, Given a large order backlog (stands at Rs83.4bn 3.5x revenue visibility), with improvement in EBITDA margins, has potential to generate further growth capital. Maintain Buy with a target price of Rs 249", says Emkay Global Financial Services research.
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