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• Execution is expected to remain strong for both BHEL and L&T in
Mar-q. BHEL reports provisional results on 4th April- our FY11 estimates
imply sales growth of 23.8% and PAT growth of 32.8% YoY (2.5% below
consensus). We expect ~21.6% revenue growth for L&T, on a high base of
Mar-q last year and ~20% PAT growth, in line with consensus.
• Order flows anemic - L&T likely to miss estimates by a wide margin.
BHEL may come closer to guidance. L&T has reported Rs11bn orders in
Mar-q vs. Rs375bn ask. BHEL has reported ~Rs117bn inflows; vs Rs200B
ask. Both cos disclose unreported orders along with earnings. Both have
faced deferment of widely touted orders- (a) Share in NTPC boiler bulk
tender of ~Rs110bn (both L&T and BHEL in fray), (b) Award of BHEL's
share of NTPC TG tender (~Rs34bn), (c) Captive Hyderabad metro order by
L&T (~Rs95bn).
• All ears for FY12 guidance on execution and inflows. For L&T, we are
factoring ~20% growth in standalone revenue (consensus 23.3%). L&T’s
execution cycle is lengthening, with more power sector orders, and costs are
rising: thus revenue/margin booking may be lumpy. The company usually
issues its outlook in the second half of May. Given ongoing funding
problems for private IPPs, market expectations of BHEL’s revenue growth
(20-21%) too needs to be validated by the MoU it would sign with govt in
May. While we are OW on both names, stocks might move sideways over
next few months in anticipation of these announcements.
• T&D plays – mixed P&L trend: We expect moderate topline growth
(~8.3%) and stable margins for CG (~16.2%) in Mar-q. Strong execution
and margin performance are expected to continue in Siemens, we est. 34%
PAT growth. The open offer closes on 13th April; post this event we expect
healthy fundamentals to provide support to Siemens stock price. ABB is not
out of the woods yet- PAT de-growth is likely to persist. There was a pick
up in transmission ordering by PGCIL in Mar-q. CG (OW) remains our toppick
in the T&D space.
• Suzlon (OW) reported two large orders adding to 1.22GW in Mar-q,
improving FY12 earnings visibility. We est. consol PAT of Rs3.2bn in Marq,
~10% ahead of consensus. Punj Lloyd (N): Growth and margin
uncertainty prevails owing to weak track record and Libyan unrest.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
• Execution is expected to remain strong for both BHEL and L&T in
Mar-q. BHEL reports provisional results on 4th April- our FY11 estimates
imply sales growth of 23.8% and PAT growth of 32.8% YoY (2.5% below
consensus). We expect ~21.6% revenue growth for L&T, on a high base of
Mar-q last year and ~20% PAT growth, in line with consensus.
• Order flows anemic - L&T likely to miss estimates by a wide margin.
BHEL may come closer to guidance. L&T has reported Rs11bn orders in
Mar-q vs. Rs375bn ask. BHEL has reported ~Rs117bn inflows; vs Rs200B
ask. Both cos disclose unreported orders along with earnings. Both have
faced deferment of widely touted orders- (a) Share in NTPC boiler bulk
tender of ~Rs110bn (both L&T and BHEL in fray), (b) Award of BHEL's
share of NTPC TG tender (~Rs34bn), (c) Captive Hyderabad metro order by
L&T (~Rs95bn).
• All ears for FY12 guidance on execution and inflows. For L&T, we are
factoring ~20% growth in standalone revenue (consensus 23.3%). L&T’s
execution cycle is lengthening, with more power sector orders, and costs are
rising: thus revenue/margin booking may be lumpy. The company usually
issues its outlook in the second half of May. Given ongoing funding
problems for private IPPs, market expectations of BHEL’s revenue growth
(20-21%) too needs to be validated by the MoU it would sign with govt in
May. While we are OW on both names, stocks might move sideways over
next few months in anticipation of these announcements.
• T&D plays – mixed P&L trend: We expect moderate topline growth
(~8.3%) and stable margins for CG (~16.2%) in Mar-q. Strong execution
and margin performance are expected to continue in Siemens, we est. 34%
PAT growth. The open offer closes on 13th April; post this event we expect
healthy fundamentals to provide support to Siemens stock price. ABB is not
out of the woods yet- PAT de-growth is likely to persist. There was a pick
up in transmission ordering by PGCIL in Mar-q. CG (OW) remains our toppick
in the T&D space.
• Suzlon (OW) reported two large orders adding to 1.22GW in Mar-q,
improving FY12 earnings visibility. We est. consol PAT of Rs3.2bn in Marq,
~10% ahead of consensus. Punj Lloyd (N): Growth and margin
uncertainty prevails owing to weak track record and Libyan unrest.
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