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Consolidate Construction Consortium – 3QFY2011 Result Update
CCCL extended its disappointing performance this quarter as well. While top-line
came in flat mainly on account of the slow-moving infrastructure orders, margins
positively surprised. However, bottom-line disappointed owing to higher share of
joint venture (JV) profits. We have pruned our FY2011 and FY2012 estimates to
reflect the same. Since our last downgrade in the 2QFY2011 result update, the
stock has fallen by ~35%. However, with the stock trading at reasonable
valuations at current levels, we maintain a Buy.
Subdued performance due to slow-moving infra orders: Top-line grew by a mere
10% yoy to `496.2cr (`450.9cr) despite a weak 3QFY2010. On qoq basis too
the company posted a mere 1.4% growth which was disappointing considering
that second half of the year is usually robust for the construction industry. On the
margin front, CCCL fared well posting EBITDA margin of 9.7% (9.0%) and qoq
margins increased by 190bp. However, bottom-line came in below expectations
at `16.7cr mainly on the back of lower top-line and higher share of JV profits.
Outlook and Valuation: Since the last few quarters, CCCL has been
disappointing on the top-line front and posting erratic margins too. We however,
expect some improvement in 4QFY2011 owing to a low base (recorded dismal
performance in 2HFY2010). Thus, we are penciling in modest top-line and
bottom-line CAGR of 19.2% and 12.6% over FY2010-12, respectively. At current
levels of `53, the stock is trading at a P/E of 8.4x and P/BV of 1.3x on FY2012E
basis, which we believe factors in all the negatives. We maintain a Buy on the
stock, with a Target Price of `63.
Top-line disappoints in spite of low base
CCCL posted disappointing set of numbers for 3QFY2011. Top-line grew by mere
10% yoy to `496.2cr (`450.9cr) in spite of a weak 3QFY2010. On qoq basis too,
the company posted mere 1.4% growth in top-line which was disappointing as the
second half of a year is usually robust for the construction industry. Of the `470cr
YTD revenues booked by the company’s infra segment, `410cr came from the
Chennai Airport project implying non-movement of other orders in the segment.
For 9MFY2011, the company posted mere 13.7% yoy growth.
Order booking during the quarter was lacklustre at `250cr. However,
management indicated that the company bagged orders to the tune of ~`550cr in
January 2011.
Outlook and Valuation
We are pruning our FY2011 and FY2012 estimates to factor in the lower-top-line
growth and operating margins and higher share of JV profits. Pertinently, the
company has consistently disappointed on the top-line front and posted erratic
margins since the last few quarters.
We are penciling in modest top-line and bottom-line CAGR of 19.2% and 12.6%
over FY2010-12, respectively. At current levels of `53, the stock is trading at P/E of
8.4x and P/BV of 1.3x on FY2012E, which we believe factors in all the negatives
and provides some upside to our target price. Hence, we maintain a Buy on the
stock, with a Target Price of `63.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Consolidate Construction Consortium – 3QFY2011 Result Update
Angel Broking maintains a Buy on Consolidate Construction Consortium with a Target Price of Rs. 63.
came in flat mainly on account of the slow-moving infrastructure orders, margins
positively surprised. However, bottom-line disappointed owing to higher share of
joint venture (JV) profits. We have pruned our FY2011 and FY2012 estimates to
reflect the same. Since our last downgrade in the 2QFY2011 result update, the
stock has fallen by ~35%. However, with the stock trading at reasonable
valuations at current levels, we maintain a Buy.
Subdued performance due to slow-moving infra orders: Top-line grew by a mere
10% yoy to `496.2cr (`450.9cr) despite a weak 3QFY2010. On qoq basis too
the company posted a mere 1.4% growth which was disappointing considering
that second half of the year is usually robust for the construction industry. On the
margin front, CCCL fared well posting EBITDA margin of 9.7% (9.0%) and qoq
margins increased by 190bp. However, bottom-line came in below expectations
at `16.7cr mainly on the back of lower top-line and higher share of JV profits.
Outlook and Valuation: Since the last few quarters, CCCL has been
disappointing on the top-line front and posting erratic margins too. We however,
expect some improvement in 4QFY2011 owing to a low base (recorded dismal
performance in 2HFY2010). Thus, we are penciling in modest top-line and
bottom-line CAGR of 19.2% and 12.6% over FY2010-12, respectively. At current
levels of `53, the stock is trading at a P/E of 8.4x and P/BV of 1.3x on FY2012E
basis, which we believe factors in all the negatives. We maintain a Buy on the
stock, with a Target Price of `63.
Top-line disappoints in spite of low base
CCCL posted disappointing set of numbers for 3QFY2011. Top-line grew by mere
10% yoy to `496.2cr (`450.9cr) in spite of a weak 3QFY2010. On qoq basis too,
the company posted mere 1.4% growth in top-line which was disappointing as the
second half of a year is usually robust for the construction industry. Of the `470cr
YTD revenues booked by the company’s infra segment, `410cr came from the
Chennai Airport project implying non-movement of other orders in the segment.
For 9MFY2011, the company posted mere 13.7% yoy growth.
Order booking during the quarter was lacklustre at `250cr. However,
management indicated that the company bagged orders to the tune of ~`550cr in
January 2011.
Outlook and Valuation
We are pruning our FY2011 and FY2012 estimates to factor in the lower-top-line
growth and operating margins and higher share of JV profits. Pertinently, the
company has consistently disappointed on the top-line front and posted erratic
margins since the last few quarters.
We are penciling in modest top-line and bottom-line CAGR of 19.2% and 12.6%
over FY2010-12, respectively. At current levels of `53, the stock is trading at P/E of
8.4x and P/BV of 1.3x on FY2012E, which we believe factors in all the negatives
and provides some upside to our target price. Hence, we maintain a Buy on the
stock, with a Target Price of `63.
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