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Punj Lloyd Ltd Neutral
PUJL.BO, PUNJ IN
September quarter PAT in line, long-awaited revenue booking on Libyan orders
• Finally a quarter without one-offs: Punj Lloyd reported sales of
Rs19.6B (down 31% YoY) in Sep-q, below our estimate of Rs22.9B.
However, EBITDA of Rs183.8B (down 42%) was in line, as OPM of
9.2% was 120bps ahead of expectations. 1HFY11 margins of 8.5% are
tracking ahead of our FY11 estimate of 8%. PAT of Rs239MM (down
55% YoY) was slightly below our estimate of Rs280MM and below that
of the Street (Rs315MM). However, after a series of quarters adversely
impacted by write-offs/LDs, in this quarter, Punj Lloyd has reported a
small profit vs. a loss of Rs306MM in 1Q and an Rs1.1B loss in FY10.
• Execution lags our and Street expectations: The asking top-line
growth rate in 2HFY11 based on consensus FY11 revenue estimate of
Rs108.7B was 46% YoY. Given de-growth in 1H reported revenues of
36% YoY, this appears unlikely, in our view. Assuming 15% growth in
2H, there is a ~15% downside potential to Street top-line estimates in
FY11, in our view.
• Positive update on Libya: Rs1.7B of revenue was booked on Libyan
orders (~Rs97B); they comprise ~38% of the current OB. The revenue
booking mainly represents the initial advance for starting work on one of
the contracts, in our view.
• Order book of Rs254.7B is down 5% YoY: The pace of revival in topline
growth and sustainable margins are key focus areas
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