Centrum's research report on Techno Electric
TEEC reported modest revenue execution at Rs 3.3bn (+4% YoY and +10% QoQ); which was complimented by PBIT of Rs491mn (+50% YoY and +9% QoQ). The PBIT margin was buoyant at 15.1% vs 15.2% in Q2FY17. The order intake was near zero and stood at Rs 23bn and management has guided for L1 at Rs 2.5bn and order bid pipeline at +Rs30bn and hence order wins will create firm visibility for FY19E and beyond.
Outlook
We downgrade our rating on Techno Electric (TEEC) to Hold and revise our TP to Rs 410 (earlier TP of Rs 445). EBITDA earnings bounced back YoY owing to higher EPC execution, a wider PBIT margin of 15.1%, and higher PLF from wind segment. The order intake and order book has been sluggish, and the conversion of the order bid pipeline of +Rs 30bn and replenishment of the current order book of Rs 23bn holds the key.
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