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India Equity Research Reports, IPO and Stock News
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PRATIBHA INDUSTRIES LTD
RECOMMENDATION: BUY
TARGET PRICE: RS.81
FY12E P/E: 6.1X
q Revenues of the company for Q3FY11 reported a growth of 26% YoY,
slightly lower than our estimates.
q Operating margins stood at 15% for Q3FY11 vis-à-vis 14.1% in Q3FY10.
Margins are better than our estimates and led by focus of company towards
higher margin water and irrigation segment.
q Net profit growth was lower than our estimates and was impacted by
higher interest outgo.
q Company's performance was below our estimates, we thus reduce our
order inflow and execution estimates downwards.
q At current price of Rs 54, stock is trading at 8.3x and 6.1x P/E and 4.6x
and 3.8x EV/EBITDA on FY11 and FY12 estimates respectively. We arrive
at a revised price target of Rs 81 (Rs 101 earlier) on FY12 estimates and
continue to maintain BUY on the stock.
Revenue growth lower than our estimate
n Revenues of the company for Q3FY11 reported a growth of 26% YoY, slightly
lower than our estimates. This was impacted by lower than expected order inflow
seen till for the company in 9MFY11.
n Current order book of company stands at nearly Rs.36 bn and order inflow in
9MFY11 for the company stood at Rs 12 bn based on order announcements
made till date. Management had earlier given a guidance of closing order book
of nearly Rs 50 bn for FY11. Due to lower than expected order inflow till
9MFY11, we thus reduce our order inflow assumptions for the company to nearly
Rs 20.5bn for FY11 and Rs 25.5 bn for FY12.
n Company has been in talks with various foreign players to form JV's for larger
sized projects and to enter into new geographies. It has also formed JV's with
some Turkish and Israel based companies to venture into water desalination
project.
n With the current order book and expected order inflows, we expect revenues to
grow at a CAGR of 25% between FY10-FY12.
Operating margins better than our estimates
n Operating margins stood at 15% for Q3FY11 vis-à-vis 14.1% in Q3FY10. Margins
are better than our estimates and led by focus of company towards higher margin
water and irrigation segment.
n We maintain our estimates and expect margins to be 13.5% for FY11 and 14%
for FY12 and going forward.
Net profit growth impacted by higher interest outgo
n Net profit growth was lower than our estimates and was impacted by higher interest
outgo.
n Company had raised Rs 1 bn from QIP and 500 mn through preferential allotment
during Q3FY11. We expect these funds to be utilized for repayment of high
cost debt. We thus expect interest outgo to decline going forward.
n Post revising our revenue and order inflow estimates downwards, we now expect
net profits to grow at a CAGR of 26% between FY10-FY12.
Valuation and recommendation
n At current price of Rs 54, stock is trading at 8.3x and 6.1x P/E and 4.6x and 3.8x
EV/EBITDA on FY11 and FY12 estimates respectively.
n Due to lower than expected order inflow in the current fiscal till date, we tweak
our estimates for the company
n We arrive at a revised price target of Rs 81 (Rs 101 earlier) on FY12 estimates
and continue to maintain BUY on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
PRATIBHA INDUSTRIES LTD
RECOMMENDATION: BUY
TARGET PRICE: RS.81
FY12E P/E: 6.1X
q Revenues of the company for Q3FY11 reported a growth of 26% YoY,
slightly lower than our estimates.
q Operating margins stood at 15% for Q3FY11 vis-à-vis 14.1% in Q3FY10.
Margins are better than our estimates and led by focus of company towards
higher margin water and irrigation segment.
q Net profit growth was lower than our estimates and was impacted by
higher interest outgo.
q Company's performance was below our estimates, we thus reduce our
order inflow and execution estimates downwards.
q At current price of Rs 54, stock is trading at 8.3x and 6.1x P/E and 4.6x
and 3.8x EV/EBITDA on FY11 and FY12 estimates respectively. We arrive
at a revised price target of Rs 81 (Rs 101 earlier) on FY12 estimates and
continue to maintain BUY on the stock.
Revenue growth lower than our estimate
n Revenues of the company for Q3FY11 reported a growth of 26% YoY, slightly
lower than our estimates. This was impacted by lower than expected order inflow
seen till for the company in 9MFY11.
n Current order book of company stands at nearly Rs.36 bn and order inflow in
9MFY11 for the company stood at Rs 12 bn based on order announcements
made till date. Management had earlier given a guidance of closing order book
of nearly Rs 50 bn for FY11. Due to lower than expected order inflow till
9MFY11, we thus reduce our order inflow assumptions for the company to nearly
Rs 20.5bn for FY11 and Rs 25.5 bn for FY12.
n Company has been in talks with various foreign players to form JV's for larger
sized projects and to enter into new geographies. It has also formed JV's with
some Turkish and Israel based companies to venture into water desalination
project.
n With the current order book and expected order inflows, we expect revenues to
grow at a CAGR of 25% between FY10-FY12.
Operating margins better than our estimates
n Operating margins stood at 15% for Q3FY11 vis-à-vis 14.1% in Q3FY10. Margins
are better than our estimates and led by focus of company towards higher margin
water and irrigation segment.
n We maintain our estimates and expect margins to be 13.5% for FY11 and 14%
for FY12 and going forward.
Net profit growth impacted by higher interest outgo
n Net profit growth was lower than our estimates and was impacted by higher interest
outgo.
n Company had raised Rs 1 bn from QIP and 500 mn through preferential allotment
during Q3FY11. We expect these funds to be utilized for repayment of high
cost debt. We thus expect interest outgo to decline going forward.
n Post revising our revenue and order inflow estimates downwards, we now expect
net profits to grow at a CAGR of 26% between FY10-FY12.
Valuation and recommendation
n At current price of Rs 54, stock is trading at 8.3x and 6.1x P/E and 4.6x and 3.8x
EV/EBITDA on FY11 and FY12 estimates respectively.
n Due to lower than expected order inflow in the current fiscal till date, we tweak
our estimates for the company
n We arrive at a revised price target of Rs 81 (Rs 101 earlier) on FY12 estimates
and continue to maintain BUY on the stock.
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