Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
BGR Energy Systems Limited
Investment Rationale
Q3 FY2011 results: BGR Energy posted 3QFY11 revenue of Rs12510mn (up 97%
YoY) and PAT at Rs876mn (up 30% YoY) on account of stronger execution, higher other
income and lower tax provision. EBITDA at Rs1413mn was up 98% YoY as BGR maintained
EBITDA margins of ~11.3%.
Order book position: BGR's order backlog is Rs 93bn. The Rajasthan SEB is due to
award two BTG contracts of Rs 61bn each (1,320MW each) in which BHEL is L1 and
BGR is L2. BGR is confident of matching the L1 price in at least one of the orders. These
orders, which were to be awarded by the end of December 2010, have been delayed
and are expected to be awarded by the first week of April 2011. In addition, the company
has participated in 4-5 projects (EPC + NTPC 11x660 MW bulk tender) of ~ Rs
130-150bn opportunity to be finalized over the next 3-5 months. Order inflow are a major
concern.
BGR will benefit from JV with Hitachi: BGR formed JVs with Hitachi Ltd., Japan and
Hitachi Power Europe GmbH, Germany for the design, engineering and manufacture of
Supercritical Steam Turbine Generator and Supercritical Steam Generator (Boilers) of
660 MW to 1000 MW.
Two separate companies, namely BGR Turbines Company Pvt Ltd. for design, manufacture,
installation and commissioning of supercritical steam turbines and generators for
TPP and BGR Boilers Pvt Ltd for supercritical steam generators for TPP shall be formed.
The Turbine JV will attract an estimated investment of Rs 3000 Crore (BGR - 74% and
Hitachi Ltd. - 26%) while the Boiler JV will involve an investment RS 1400 Crore (BGR -
70% and Hitachi Europe - 30%). Both the JV's are expected to commence production
from 2012.
Expanding market due to more turnkey orders: With CEA targeting for incremental
1,00,000 MW of generation capacity in the XIIth Five Year Plan, the market opportunity
for BoP would also increase correspondingly. State Gencos of Maharashtra, MP and Rajasthan
have started to tender BoP equipments as a turnkey package. We expect more
utilities to follow this route given the cost benefits and also lesser hassles of interfacing
with various equipment manufacturers. This would increase the opportunity space for
BGR Energy.
Outlook & Valuations: At CMP of Rs 469, the stock is trading at a forward P/E of
10.80x FY11E and 9.05x FY12E. We maintain BUY recommendation with a target price
of Rs 710 per share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
BGR Energy Systems Limited
Investment Rationale
Q3 FY2011 results: BGR Energy posted 3QFY11 revenue of Rs12510mn (up 97%
YoY) and PAT at Rs876mn (up 30% YoY) on account of stronger execution, higher other
income and lower tax provision. EBITDA at Rs1413mn was up 98% YoY as BGR maintained
EBITDA margins of ~11.3%.
Order book position: BGR's order backlog is Rs 93bn. The Rajasthan SEB is due to
award two BTG contracts of Rs 61bn each (1,320MW each) in which BHEL is L1 and
BGR is L2. BGR is confident of matching the L1 price in at least one of the orders. These
orders, which were to be awarded by the end of December 2010, have been delayed
and are expected to be awarded by the first week of April 2011. In addition, the company
has participated in 4-5 projects (EPC + NTPC 11x660 MW bulk tender) of ~ Rs
130-150bn opportunity to be finalized over the next 3-5 months. Order inflow are a major
concern.
BGR will benefit from JV with Hitachi: BGR formed JVs with Hitachi Ltd., Japan and
Hitachi Power Europe GmbH, Germany for the design, engineering and manufacture of
Supercritical Steam Turbine Generator and Supercritical Steam Generator (Boilers) of
660 MW to 1000 MW.
installation and commissioning of supercritical steam turbines and generators for
TPP and BGR Boilers Pvt Ltd for supercritical steam generators for TPP shall be formed.
The Turbine JV will attract an estimated investment of Rs 3000 Crore (BGR - 74% and
Hitachi Ltd. - 26%) while the Boiler JV will involve an investment RS 1400 Crore (BGR -
70% and Hitachi Europe - 30%). Both the JV's are expected to commence production
from 2012.
Expanding market due to more turnkey orders: With CEA targeting for incremental
1,00,000 MW of generation capacity in the XIIth Five Year Plan, the market opportunity
for BoP would also increase correspondingly. State Gencos of Maharashtra, MP and Rajasthan
have started to tender BoP equipments as a turnkey package. We expect more
utilities to follow this route given the cost benefits and also lesser hassles of interfacing
with various equipment manufacturers. This would increase the opportunity space for
BGR Energy.
Outlook & Valuations: At CMP of Rs 469, the stock is trading at a forward P/E of
10.80x FY11E and 9.05x FY12E. We maintain BUY recommendation with a target price
of Rs 710 per share.
No comments:
Post a Comment