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Sadbhav Engineering
Sadbhav Engineering (SEL) posted numbers that were much higher than our and street
expectations both on the top-line and bottom-line fronts. We are revising our estimates for
FY2012 and FY2013, given the higher-than-expected performance on the top-line front
and EBITDA margin pressure. We expect the company to log a CAGR of 13.9% and 10.3%
in the top line and bottom line, respectively, over FY2011–13 on the back of high base
created in FY2011. We believe SEL will take a breather to consolidate before the next leap.
At current levels, the stock is trading at valuations of 7.1x FY2013E EPS (adjusted for BOT
investments). We believe SEL has posted consistent growth over the last few quarters and is
appropriately rewarded on the bourses with great outperformance over its peers.
Hence, we recommend an Accumulate rating on the stock with a revised SOTP-based
target price of `161 (`171), given the recent sharp run up in the stock price and lower
growth expected going ahead.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sadbhav Engineering
Sadbhav Engineering (SEL) posted numbers that were much higher than our and street
expectations both on the top-line and bottom-line fronts. We are revising our estimates for
FY2012 and FY2013, given the higher-than-expected performance on the top-line front
and EBITDA margin pressure. We expect the company to log a CAGR of 13.9% and 10.3%
in the top line and bottom line, respectively, over FY2011–13 on the back of high base
created in FY2011. We believe SEL will take a breather to consolidate before the next leap.
At current levels, the stock is trading at valuations of 7.1x FY2013E EPS (adjusted for BOT
investments). We believe SEL has posted consistent growth over the last few quarters and is
appropriately rewarded on the bourses with great outperformance over its peers.
Hence, we recommend an Accumulate rating on the stock with a revised SOTP-based
target price of `161 (`171), given the recent sharp run up in the stock price and lower
growth expected going ahead.
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