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Results in line: Bharati Shipyard (BHSL) reported revenues to the tune of
Rs3.45bn, a growth of 8% YoY; however, flat sequentially. Margins were steady
at 18.4%, translating into PAT of Rs232m, down 30% YoY and 21% QoQ. Subsidy
booking during the quarter stood at Rs397m. The company reported a loss of
Rs46m, excluding subsidy.
Debt position: With the acquisition of Tebma Shipyard this quarter, the debt on
BHSL’s books now stands at Rs30bn, translating into a debt:equity ratio of 3.2:1.
The company has repaid FCCBs to the tune ~Rs3bn during the quarter.
Unexecuted order book declines: BHSL’s unexecuted order book now stands at
Rs12.4bn, giving it a visibility of only three quarters. As per the management,
orders worth Rs20bn are under negotiation and some of these are expected to
be finalized in the next couple of months.
Status of rig: The delivery of the rig being built for Great Offshore (GOFF) has
been delayed till October 2011. As per the management, the rig will be launched
at a time just ahead of its deployment. Since, it expects the rig to get contracted
post monsoon, it has delayed its delivery till then.
Valuations: We are valuing BHSL’s standalone business based on 6x EV/EBITDA
FY12e. From the company’s EV, we are deducting debt of Rs8.3bn, which
reflects its investment in GOFF. The standalone value of BHSL stands at
Rs3.56bn which translates to Rs112/share. Further, we are valuing GOFF at
6xFY12 EV/ EBITDA. BHSL’s 49.7% stake, thereby, stands at Rs10.77bn. Of this,
we deduct the debt of Rs8.3bn taken by BHSL for the acquisition which gives a
value of Rs2.47bn. Post a 10% holding company discount, the value per share
translates to Rs70. We downgrade the stock to ‘Accumulate’ with our revised
SOTP based price target of Rs183.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Results in line: Bharati Shipyard (BHSL) reported revenues to the tune of
Rs3.45bn, a growth of 8% YoY; however, flat sequentially. Margins were steady
at 18.4%, translating into PAT of Rs232m, down 30% YoY and 21% QoQ. Subsidy
booking during the quarter stood at Rs397m. The company reported a loss of
Rs46m, excluding subsidy.
Debt position: With the acquisition of Tebma Shipyard this quarter, the debt on
BHSL’s books now stands at Rs30bn, translating into a debt:equity ratio of 3.2:1.
The company has repaid FCCBs to the tune ~Rs3bn during the quarter.
Unexecuted order book declines: BHSL’s unexecuted order book now stands at
Rs12.4bn, giving it a visibility of only three quarters. As per the management,
orders worth Rs20bn are under negotiation and some of these are expected to
be finalized in the next couple of months.
Status of rig: The delivery of the rig being built for Great Offshore (GOFF) has
been delayed till October 2011. As per the management, the rig will be launched
at a time just ahead of its deployment. Since, it expects the rig to get contracted
post monsoon, it has delayed its delivery till then.
Valuations: We are valuing BHSL’s standalone business based on 6x EV/EBITDA
FY12e. From the company’s EV, we are deducting debt of Rs8.3bn, which
reflects its investment in GOFF. The standalone value of BHSL stands at
Rs3.56bn which translates to Rs112/share. Further, we are valuing GOFF at
6xFY12 EV/ EBITDA. BHSL’s 49.7% stake, thereby, stands at Rs10.77bn. Of this,
we deduct the debt of Rs8.3bn taken by BHSL for the acquisition which gives a
value of Rs2.47bn. Post a 10% holding company discount, the value per share
translates to Rs70. We downgrade the stock to ‘Accumulate’ with our revised
SOTP based price target of Rs183.
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