ICICIdirect.com's report on Sintex Industries
Revenues during the quarter were up 9.3% YoY Rs 2168.2 crore (our estimate: Rs 2118.5 crore) led by growth of 19.5% & ~15% YoY from the prefab and custom moulding (due to pick-up in automotive segment) respectively. On the other hand, monolithic & EPC segment reported 10.4% and 16.9% YoY drop in their revenues. However, strong growth from the textile division helped the company to beat the revenue growth estimates during the quarter
The EBITDA margin for the quarter also remained better, with an improvement of 82 bps YoY to 18.8% (vs. I-direct estimate: 17%) led by the better performance of its key segments
Despite better operating results, EPS for the quarter declined ~21% YoY to Rs 4.18/share due to heavy equity dilution on account of FCCB conversion
"Given the robust outlook for prefab and spinning business coupled with an improvement in the custom moulding business, we expect the growth momentum to continue with healthy margins. However, heavy capex on the textile segment and pending FCCB conversion remain a key overhang. Hence, we downgrade our rating to HOLD with SOTP based revised target price of Rs 122/share", says ICICIdirect.com research report.
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