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UBS Investment Research
L & T
W ins Rs35bn EPC order for gas power plant
3x 360MW project order won through international competitive bidding
L&T has won this order from PPN Power Generating Company, whose main
promoters are the Apollo Group (L&T has executed a number of building projects
for this group). This is an expansion project of a 330.5MW plant. The order will
likely have an execution timeline of 24-30 months and be booked in Q1 FY12. This
is a large order in the gas-based power segment. L&T is currently executing the
Vemagiri expansion project for GMR (2x 384MW, Rs20bn order), among others.
Q4 FY11 results on 19 May, Thursday; we expect PAT of Rs14.3bn
We expect Q4 FY11 revenues of Rs159bn (+17% YoY), operating profit of
Rs22.3bn (consensus estimate of Rs22.9bn), EBITDA margins of 14% (-110bps
YoY) and PAT of Rs14.3bn (+7% YoY; consensus estimate of Rs15.2bn). We
expect order flows of Rs270bn in Q4 (our FY11 estimate of Rs765bn).
We factor 16% revenue growth in FY12 with EBITDA margins of ~12%
Even if Q4 orders are lower than our estimates (order announcements have been
weak), impact on FY12 revenues is unlikely to be significant, in our view, given the
large backlog (2.3x one-year forward revenues). We estimate FY11 order inflows to
increase 10% YoY. A 5% lower growth in orders than our estimate could impact
our FY12 revenue growth by about 1.3%. For FY12, we factor in about 18% YoY
growth in order inflows to about Rs900bn. We forecast EBITDA margins of 12.3%
in FY11 (50bps decline YoY) and flat margins thereafter.
Valuation: maintain Buy, top pick in Indian infra space
We maintain our Buy rating with a sum-of-the-parts-based price target of Rs2,100
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
L & T
W ins Rs35bn EPC order for gas power plant
3x 360MW project order won through international competitive bidding
L&T has won this order from PPN Power Generating Company, whose main
promoters are the Apollo Group (L&T has executed a number of building projects
for this group). This is an expansion project of a 330.5MW plant. The order will
likely have an execution timeline of 24-30 months and be booked in Q1 FY12. This
is a large order in the gas-based power segment. L&T is currently executing the
Vemagiri expansion project for GMR (2x 384MW, Rs20bn order), among others.
Q4 FY11 results on 19 May, Thursday; we expect PAT of Rs14.3bn
We expect Q4 FY11 revenues of Rs159bn (+17% YoY), operating profit of
Rs22.3bn (consensus estimate of Rs22.9bn), EBITDA margins of 14% (-110bps
YoY) and PAT of Rs14.3bn (+7% YoY; consensus estimate of Rs15.2bn). We
expect order flows of Rs270bn in Q4 (our FY11 estimate of Rs765bn).
We factor 16% revenue growth in FY12 with EBITDA margins of ~12%
Even if Q4 orders are lower than our estimates (order announcements have been
weak), impact on FY12 revenues is unlikely to be significant, in our view, given the
large backlog (2.3x one-year forward revenues). We estimate FY11 order inflows to
increase 10% YoY. A 5% lower growth in orders than our estimate could impact
our FY12 revenue growth by about 1.3%. For FY12, we factor in about 18% YoY
growth in order inflows to about Rs900bn. We forecast EBITDA margins of 12.3%
in FY11 (50bps decline YoY) and flat margins thereafter.
Valuation: maintain Buy, top pick in Indian infra space
We maintain our Buy rating with a sum-of-the-parts-based price target of Rs2,100
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