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Great Offshore
I m p r o v e d o p e r a t i n g p e r f o r m a n c e …
Great Offshore Ltd (Great Offshore) reported an improved operating
performance on a QoQ basis with revenues and EBITDA increasing by 6%
and 61%, respectively. EBITDA has increased mainly due to lower project
expenses and decrease in repairs and maintenance expense due to lower
dry docking. EBITDA margin has improved by 1670 bps to 48.4%. Great
Offshore booked profit of | 47.8 crore on sale of a jack up rig (Amarnath),
which enabled it to report 15% QoQ growth in net profit to | 54.9 crore.
Though the company has secured long-term contracts at higher rates for
two of its assets Viz. “Badrinath” and “Kedarnath”, lower project income
and sale of jack up rig “Amarnath” would offset the same and we expect
the topline to remain flat over the next two years.
ƒ Strong operating performance in Q1FY12
Great Offshore reported 5.5% QoQ rise in topline at | 218.6 crore in
Q1FY12. The main factor contributing to the rise in topline was
deployment of its drilling rig Kedarnath on long-term charter contract
with ONGC at a higher rate. The company’s EBITDA also improved to |
105.8 crore with expansion in EBITDA margin by 1670 bps to 48.4% in
Q1FY12. Though interest and depreciation declined by 8% and 10%,
respectively, higher tax outgo to the tune of | 38 crore (including
deferred taxation of | 21 crore) has resulted in the company reporting a
modest increase of 15% in net profit to | 54.9 crore.
V a l u a t i o n
At the CMP of | 223, the stock is trading at 5.6x FY13E EPS of | 39.5 and
0.55x FY13E book value of | 408.4. We have valued Great Offshore at
0.65x FY13E book value to arrive at price target of | 266 and recommend
a BUY rating on the stock. Existing investors should also continue to hold
the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Great Offshore
I m p r o v e d o p e r a t i n g p e r f o r m a n c e …
Great Offshore Ltd (Great Offshore) reported an improved operating
performance on a QoQ basis with revenues and EBITDA increasing by 6%
and 61%, respectively. EBITDA has increased mainly due to lower project
expenses and decrease in repairs and maintenance expense due to lower
dry docking. EBITDA margin has improved by 1670 bps to 48.4%. Great
Offshore booked profit of | 47.8 crore on sale of a jack up rig (Amarnath),
which enabled it to report 15% QoQ growth in net profit to | 54.9 crore.
Though the company has secured long-term contracts at higher rates for
two of its assets Viz. “Badrinath” and “Kedarnath”, lower project income
and sale of jack up rig “Amarnath” would offset the same and we expect
the topline to remain flat over the next two years.
ƒ Strong operating performance in Q1FY12
Great Offshore reported 5.5% QoQ rise in topline at | 218.6 crore in
Q1FY12. The main factor contributing to the rise in topline was
deployment of its drilling rig Kedarnath on long-term charter contract
with ONGC at a higher rate. The company’s EBITDA also improved to |
105.8 crore with expansion in EBITDA margin by 1670 bps to 48.4% in
Q1FY12. Though interest and depreciation declined by 8% and 10%,
respectively, higher tax outgo to the tune of | 38 crore (including
deferred taxation of | 21 crore) has resulted in the company reporting a
modest increase of 15% in net profit to | 54.9 crore.
V a l u a t i o n
At the CMP of | 223, the stock is trading at 5.6x FY13E EPS of | 39.5 and
0.55x FY13E book value of | 408.4. We have valued Great Offshore at
0.65x FY13E book value to arrive at price target of | 266 and recommend
a BUY rating on the stock. Existing investors should also continue to hold
the stock.
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