Prabhudas Lilladher recommended Hold rating on GE TandD India with a target price of Rs 71 in its research report dated July 01, 2020.
Prabhudas Lilladher's research report on GE TandD India
GE T&D (GETD) reported weak set of numbers for the quarter with a revenue de-growth of 26% YoY leading to loss at bottom-line. Sales during the quarter got impacted by Rs2bn owing to declining HVDC (~Rs400mn), lockdown impact, global supply chain issues and delay in projects by customers. Order inflows were down 33% YoY at Rs6.6bn owing to slowdown in commercial activities and deferment in bids & projects. L1 position orders worth ~Rs1.7bn were also delayed due to Covid-19 lockdown. Order book stood at Rs59bn, down 8% YoY providing revenue visibility for next 1.5 years. Management indicated that during lockdown there were no cancellation of orders but they noticed delay in decision making of projects. Also, company’s goal of becoming debt free FY21E may be delayed due to unprecedented situation, nevertheless efforts will still continue. Going ahead focus will be placed on strengthening the order backlog, becoming cash rich and improving working capital.
We believe medium term challenges would continue on the execution and order inflow front due to the pandemic and overall challenging environment. We have cut our earnings estimates by 92%/22% YoY for FY21E/22E owing to weak FY20E and cautious outlook. We maintain Hold with TP of Rs71.
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