Sintex Industries Ltd |
Above expectations |
HOLD
CMP: Rs 430 Target Price: Rs 325
n Numbers above our estimates driven by significantly higher margins in standalone business, higher revenues in subsidiaries and higher other income (might be forex gain)
n Working capital issues aggravate with inspite of 16% lower revenues compared with Q4FY10, working capital has increased by Rs1bn (working capital cycle of about 170days)
n Earnings upgrade (10-12%) likely, will take a call after the concall tomorrow – need some clarity on (1) higher other income and (2) 42% growth in Nief in euro terms
n Stock trading at 11.9xFY12E earnings (Rs36/Share) and 2.1xFY12E book value (ROE of 19%), to review ratings (currently ‘hold’) post the concall tomorrow
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