Emco Q4FY11 Result Update; Below estimate; Maintain Reduce;Emkay

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Emco Q4FY11 Result Update; Below estimate; Maintain Reduce; Target: Rs 60

n    Q4 PAT of Rs48mn, significantly lower than our estimate (Rs128mn) led by disappointment in transformer business both on volumes and margins

n    Project revenues (21% yoy growth) neutralize impact of fall in transformers revenues (down 34% yoy) but not margins. Overall revenues stand at Rs3.4bn down 11% yoy.

n    Overall ambiguity continues as management guides for traction in order inquires but indicates margins outlook is uncertain

n    Reduce FY12E earnings by 48% to Rs2.1/share introduce FY13E earnings of Rs4/share; Trading at 13.6x FY13E earnings and 6.9xFY12E EBITDA- expensive; Maintain Reduce