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Simplex Infrastructure:: Order inflow traction continues…
While Simplex Infrastructure’s (SIL) Q3FY11 results came below our
expectation, the order inflow continues to remain strong for SIL. With
order inflow of | 2,128 crore in Q3FY11, the order book stands at |
13,912 crore, 3x order book to bill ratio (on TTM basis). Beside this, the
company has bagged orders worth | 900 crore till date and has L-1 bids
of | 1938 crore. While revenue growth is expected to be marginal in
FY11E, the management has guided at revenue growth of 20-25% in
FY12E. We recommend a BUY rating on the stock.
Results lower than expected, guides 20-25% growth for FY12E
SIL’s Q3FY11 revenues at | 1,166.7 crore were below our expectation
due to 46% de-growth in the overseas segment. On the positive side,
domestic sales have grown 28% YoY. The EBITDA margin at 9.2% was
below our estimates of 9.8% due to lower absorption of overhead
following slower revenue growth. Going ahead, with stability in
international revenues and strong traction in the domestic market, the
company has guided for 20-25% growth in FY12E.
Robust order inflow, order book at | 13,912 crore
SIL continued to report good order inflows with orders worth | 2,128
crore during Q3FY11. The order book stood at | 13,912 crore, 3x order
book to bill (on TTM basis). Additionally, SIL has received orders worth
| 900 crore in January 2011 and is L-1 bidder for orders worth | 1,938
crore. Thus, the management guidance of closing FY11 at | 15,000
crore appears to be easily achievable.
Valuation
At the CMP, the stock is trading at 10.5x FY12 EPS and 1.3x FY12 P/BV.
With a strong well diversified order book and lowest equity
commitment towards subsidiary, SIL’s earnings are expected to grow at
a CAGR of 13.4% during FY10-FY12E. We have maintained our BUY
rating on the stock with a price target of | 366. We have valued SIL’s
core business at | 349/share (11x FY12 EPS), its oil rig business at |
7/share and BOT road project at | 10/share (at 1x P/BV).
Q2FY11 result analysis
• SIL’s Q3FY11 revenues, at | 1,166.7 crore, were below our
expectation of | 1,256 crore mainly due to lower revenue booking in
the international segment. The international revenues declined 46%
YoY to | 143 crore. On the positive side, domestic revenues grew 28%
YoY to | 1,024 crore
• The EBITDA margins at 9.2% were below our estimates of 9.8% due
to lower absorption of overhead expenses on account of slower
revenue booking
• PAT at | 23.2 crore was lower than our expectation of | 32.2 crore
due to lower than expected revenues and higher interest expenses. On
a sequential basis, interest expenses have increased from | 29.5 crore
to | 36.2 crore in Q3FY11 due to an increase in cost of debt and rise in
the debt level
• Going ahead, the company has guided at 10% topline growth in FY11
vs. the 15% growth guidance earlier. However, the management has
indicated 20-25% revenue growth for FY12E on the back of positive
traction in the order inflow
• The working capital cycle, which improved to 121 days in Q3FY11
from 131 days in Q2FY11, is still high compared to FY10 when it stood
at 111 days given the delays in execution in H1FY11. Going ahead, the
company expects to bring down its working capital cycle over the next
few quarters
• Given the increase in WC, the debt has increased to | 1,491 crore in
Q3FY11
Robust order inflow continues
• The order book stood at | 13,912 crore implying 3x order book to bill
(on TTM basis) and providing revenue visibility for the next couple of
years
• The company continued to report a strong order inflow with orders of
| 2,128 crore for the quarter with 23% from roads, 22% from power,
27% from urban infra and 12% from railways
• The management has guided at closing the order book at | 15,000
crore
• Additionally, the company is L-1 bidder for orders worth | 1,938
crore. It also has a strong bid pipeline of ~| 44,000 crore
Orissa road project update
The construction of the Orissa BOOT project of ~| 1,300 crore has started
(SIL’s current order book includes | 500 crore and L-1 includes ~| 550
crore). SIL has 26% equity stake in the project and expects toll revenues
to flow in from Q1FY12.
Valuation
Given the lower than expected performance in 9MFY11 and rise in the
debt level, we have lowered our FY12/FY12 EPS estimates sharply by
15%/18%. Our revised FY11 and FY12 EPS stands at | 24.2/share and |
31.7/share, respectively.
At the CMP, the stock is trading at 10.5x FY12 EPS and 1.3x FY12 P/BV.
With a strong well diversified order book and lowest equity commitment
towards subsidiary, SIL’s earnings are expected to grow at a CAGR of
13.4% during FY10-FY12E. We have maintained our BUY rating on the
stock with a price target of | 366. We have valued SIL’s core business at |
349/share (11x FY12 EPS), the oil rig business at | 7/share and BOT road
project at | 10/share (at 1x P/BV).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Simplex Infrastructure:: Order inflow traction continues…
While Simplex Infrastructure’s (SIL) Q3FY11 results came below our
expectation, the order inflow continues to remain strong for SIL. With
order inflow of | 2,128 crore in Q3FY11, the order book stands at |
13,912 crore, 3x order book to bill ratio (on TTM basis). Beside this, the
company has bagged orders worth | 900 crore till date and has L-1 bids
of | 1938 crore. While revenue growth is expected to be marginal in
FY11E, the management has guided at revenue growth of 20-25% in
FY12E. We recommend a BUY rating on the stock.
Results lower than expected, guides 20-25% growth for FY12E
SIL’s Q3FY11 revenues at | 1,166.7 crore were below our expectation
due to 46% de-growth in the overseas segment. On the positive side,
domestic sales have grown 28% YoY. The EBITDA margin at 9.2% was
below our estimates of 9.8% due to lower absorption of overhead
following slower revenue growth. Going ahead, with stability in
international revenues and strong traction in the domestic market, the
company has guided for 20-25% growth in FY12E.
Robust order inflow, order book at | 13,912 crore
SIL continued to report good order inflows with orders worth | 2,128
crore during Q3FY11. The order book stood at | 13,912 crore, 3x order
book to bill (on TTM basis). Additionally, SIL has received orders worth
| 900 crore in January 2011 and is L-1 bidder for orders worth | 1,938
crore. Thus, the management guidance of closing FY11 at | 15,000
crore appears to be easily achievable.
Valuation
At the CMP, the stock is trading at 10.5x FY12 EPS and 1.3x FY12 P/BV.
With a strong well diversified order book and lowest equity
commitment towards subsidiary, SIL’s earnings are expected to grow at
a CAGR of 13.4% during FY10-FY12E. We have maintained our BUY
rating on the stock with a price target of | 366. We have valued SIL’s
core business at | 349/share (11x FY12 EPS), its oil rig business at |
7/share and BOT road project at | 10/share (at 1x P/BV).
Q2FY11 result analysis
• SIL’s Q3FY11 revenues, at | 1,166.7 crore, were below our
expectation of | 1,256 crore mainly due to lower revenue booking in
the international segment. The international revenues declined 46%
YoY to | 143 crore. On the positive side, domestic revenues grew 28%
YoY to | 1,024 crore
• The EBITDA margins at 9.2% were below our estimates of 9.8% due
to lower absorption of overhead expenses on account of slower
revenue booking
• PAT at | 23.2 crore was lower than our expectation of | 32.2 crore
due to lower than expected revenues and higher interest expenses. On
a sequential basis, interest expenses have increased from | 29.5 crore
to | 36.2 crore in Q3FY11 due to an increase in cost of debt and rise in
the debt level
• Going ahead, the company has guided at 10% topline growth in FY11
vs. the 15% growth guidance earlier. However, the management has
indicated 20-25% revenue growth for FY12E on the back of positive
traction in the order inflow
• The working capital cycle, which improved to 121 days in Q3FY11
from 131 days in Q2FY11, is still high compared to FY10 when it stood
at 111 days given the delays in execution in H1FY11. Going ahead, the
company expects to bring down its working capital cycle over the next
few quarters
• Given the increase in WC, the debt has increased to | 1,491 crore in
Q3FY11
Robust order inflow continues
• The order book stood at | 13,912 crore implying 3x order book to bill
(on TTM basis) and providing revenue visibility for the next couple of
years
• The company continued to report a strong order inflow with orders of
| 2,128 crore for the quarter with 23% from roads, 22% from power,
27% from urban infra and 12% from railways
• The management has guided at closing the order book at | 15,000
crore
• Additionally, the company is L-1 bidder for orders worth | 1,938
crore. It also has a strong bid pipeline of ~| 44,000 crore
Orissa road project update
The construction of the Orissa BOOT project of ~| 1,300 crore has started
(SIL’s current order book includes | 500 crore and L-1 includes ~| 550
crore). SIL has 26% equity stake in the project and expects toll revenues
to flow in from Q1FY12.
Valuation
Given the lower than expected performance in 9MFY11 and rise in the
debt level, we have lowered our FY12/FY12 EPS estimates sharply by
15%/18%. Our revised FY11 and FY12 EPS stands at | 24.2/share and |
31.7/share, respectively.
At the CMP, the stock is trading at 10.5x FY12 EPS and 1.3x FY12 P/BV.
With a strong well diversified order book and lowest equity commitment
towards subsidiary, SIL’s earnings are expected to grow at a CAGR of
13.4% during FY10-FY12E. We have maintained our BUY rating on the
stock with a price target of | 366. We have valued SIL’s core business at |
349/share (11x FY12 EPS), the oil rig business at | 7/share and BOT road
project at | 10/share (at 1x P/BV).
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