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We expect our universe of Industrial companies to witness a revenue growth of 12% for the
quarter which will translate into net profit growth of 6%. Excluding Suzlon (which we expect
to report a loss), profit for the pack is expected to grow by 12% YoY (~10% growth QoQ).
Overall, we are positive on the outlook of set of numbers from BGR Energy, L&T and BHEL.
BHEL
We estimate the company to record sales growth of 20% for the quarter mainly driven by
the strong order booking. At the end of 2QFY11, BHEL had an order book of ~INR1.5tn.
Our EBITDA margin estimate is 19% for the quarter which implies flat margins compared to
last year. Net profit is estimated to be INR12.1bn - growth of 13% over 3QFY10. In the last
two years, order inflows for the company have been stagnating - this remains the key
concern on the stock going forward. Order inflows from the industrials segment can have a
positive surprise given the strong traction in the economy.
L&T
L&T has not been able to show strong revenue growth in 2QFY11 (~6.5%) on account of
some large projects being in the initial stages of execution, and hence, the revenue growth
was moderate YoY. In the current quarter, we expect revenue growth of ~16% YoY, EBITDA
margin of 12.6% and net profit of INR8.3bn (a growth of 20% YoY).
BGR Energy
We estimate sales and net profits to grow by ~85% YoY (13% QoQ) and ~161% YoY (10%
QoQ), respectively. The revenue booking is expected to be higher as some of the EPC project
of Kalisindh and Mettur and BoP orders of Chandrapur and Marwa are in strong execution
phase. EBITDA margin for the quarter is expected to be 11.2% against 12.2% in 3QFY10, in
line with margins in the last three quarters. There are couple of huge orders worth ~INR50bn
from RRUVNL which are expected to materialise in the fourth quarter.
Siemens
Siemens’ revenue is expected to grow by 20% YoY to INR22.4bn, while PAT to be INR1.8bn.
PAT is expected to show a decline YoY as it was very high on one of the orders booked -
which is not sustainable. We expect company to report EBITDA and PAT margin of 13% and
8%, respectively.
ABB
Over the last six quarters, ABB has been reporting lower revenue and profitability. We do
not expect any revival in the numbers and anticipate a YoY decline of 8% in revenue and
~19% in PAT.
Suzlon
We expect Suzlon to report revenue of INR50.4bn, EBITDA of INR2.5bn and loss of
INR1.5bn. The estimated revenue and EBITDA are expected to grow by 34% and 83%,
respectively, on a QoQ basis. The improvement is expected on account of higher domestic
booking and higher booking in subsidiary REPower. The under utilisation of the capacity
and higher debt remains the key issue. The improvement in utilisation would be a positive
development for the company.
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