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O v e r s e a s r e v e n u e s d r i v e e a r n i n g s …
Everest Kanto Cylinders (EKC) posted strong results for Q1FY12 with the
topline reporting growth of 54% to | 212.6 crore led by higher sales
volumes and realisations from overseas operations. Higher realisations,
better cost management and improvement in operational efficiency
helped the company to improve its EBITDA margins significantly from
6.2% in Q1fY11 to 22.5% during the quarter. Hence, helped by higher
revenues and improving margins, the company reported profit of | 29.0
crore against a loss of | 11.9 crore in the corresponding quarter last year.
ƒ Operational Highlights
During the quarter, the consolidated sales volume of EKC increased by
29.7% from 1.9 lakh cylinders in Q1FY11 to 2.4 lakh cylinders. Revenues
across geographies were higher on a YoY basis but remained subdued
QoQ. Revenues from India increased by 21.9% to | 94 crore, Dubai by
52.9% to | 89.4 crore, China by 490% to | 13.8 crore and the US by 298%
to | 24.3 crore.
ƒ Highlights of the quarter
EKC’s SEZ unit at Kandla (capacity of 2.0 lakh tones) and Gandhidham
commenced operations during the quarter. Also, its operations from the
US have started yielding positive returns from Q1FY12 onwards.
V a l u a t i o n
At the CMP of | 89, stock is trading at 9.5x and 8.5x its FY12 and FY13
estimated EPS of | 9.3 and | 10.4, respectively. The continuous rise in fuel
prices is constantly increasing the demand for CNG cylinders in India.
Also, with rising demand in overseas markets (Dubai and China) and
increasing sale of jumbo cylinders in the US, EKC’s margins would
improve further. Therefore, with the outlook for the CNG industry looking
positive, EKC’s capacity expansion plans on track and earnings witnessing
continuous improvement, we value the stock at 10x its FY13E EPS of |
10.4. We have assigned it a target price of | 104 with a BUY rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
O v e r s e a s r e v e n u e s d r i v e e a r n i n g s …
Everest Kanto Cylinders (EKC) posted strong results for Q1FY12 with the
topline reporting growth of 54% to | 212.6 crore led by higher sales
volumes and realisations from overseas operations. Higher realisations,
better cost management and improvement in operational efficiency
helped the company to improve its EBITDA margins significantly from
6.2% in Q1fY11 to 22.5% during the quarter. Hence, helped by higher
revenues and improving margins, the company reported profit of | 29.0
crore against a loss of | 11.9 crore in the corresponding quarter last year.
ƒ Operational Highlights
During the quarter, the consolidated sales volume of EKC increased by
29.7% from 1.9 lakh cylinders in Q1FY11 to 2.4 lakh cylinders. Revenues
across geographies were higher on a YoY basis but remained subdued
QoQ. Revenues from India increased by 21.9% to | 94 crore, Dubai by
52.9% to | 89.4 crore, China by 490% to | 13.8 crore and the US by 298%
to | 24.3 crore.
ƒ Highlights of the quarter
EKC’s SEZ unit at Kandla (capacity of 2.0 lakh tones) and Gandhidham
commenced operations during the quarter. Also, its operations from the
US have started yielding positive returns from Q1FY12 onwards.
V a l u a t i o n
At the CMP of | 89, stock is trading at 9.5x and 8.5x its FY12 and FY13
estimated EPS of | 9.3 and | 10.4, respectively. The continuous rise in fuel
prices is constantly increasing the demand for CNG cylinders in India.
Also, with rising demand in overseas markets (Dubai and China) and
increasing sale of jumbo cylinders in the US, EKC’s margins would
improve further. Therefore, with the outlook for the CNG industry looking
positive, EKC’s capacity expansion plans on track and earnings witnessing
continuous improvement, we value the stock at 10x its FY13E EPS of |
10.4. We have assigned it a target price of | 104 with a BUY rating.
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