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What’s the theme?
Sintex has a diversified business model marked by low volatility in sales, profit and cash flows. It is a
market leader in the Monolithic and Prefab segment.
What will move the stock?
We like Sintex primarily because of: -
Monolithic and Prefab segment are expected to show CAGR of 25% and 27% during FY11-FY13E
respectively.
Acquired overseas and domestic subsidiaries likely to show operational improvement with 300bps
increase in subsidiary margin to 12.2% in FY13e vs. FY10.
Emerging cash flow positive in FY12-FY13e through better management.
Where are we stacked versus consensus?
Our earnings estimates (EPS) for FY12 and FY13 are Rs20.2 and Rs23.6 respectively. Our FY12 earnings
estimate is 19% higher than consensus estimate of Rs19.9. We have a 'BUY' recommendation on the
stock with a target price of Rs240, which discounts FY12E earnings by 12x.
What will challenge our target price?
Execution risks in the Monolithic and Prefab segments.
Fluctuation in raw material prices denting margin.
Delay in improvement of subsidiaries.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
What’s the theme?
Sintex has a diversified business model marked by low volatility in sales, profit and cash flows. It is a
market leader in the Monolithic and Prefab segment.
What will move the stock?
We like Sintex primarily because of: -
Monolithic and Prefab segment are expected to show CAGR of 25% and 27% during FY11-FY13E
respectively.
Acquired overseas and domestic subsidiaries likely to show operational improvement with 300bps
increase in subsidiary margin to 12.2% in FY13e vs. FY10.
Emerging cash flow positive in FY12-FY13e through better management.
Where are we stacked versus consensus?
Our earnings estimates (EPS) for FY12 and FY13 are Rs20.2 and Rs23.6 respectively. Our FY12 earnings
estimate is 19% higher than consensus estimate of Rs19.9. We have a 'BUY' recommendation on the
stock with a target price of Rs240, which discounts FY12E earnings by 12x.
What will challenge our target price?
Execution risks in the Monolithic and Prefab segments.
Fluctuation in raw material prices denting margin.
Delay in improvement of subsidiaries.
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