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Operationally in line
Revenue, EBITDA were essentially in line with our estimates
EBITDA margin of 10.2% was 40bps higher than our estimate
Interest cost increased 118% y-y, net profit 19% below estimate
We will revisit estimates after incorporating 1QFY12 results
1QFY12 results
NCC reported in-line revenue and
EBITDA in 1QFY12. Revenue increased
5% y-y to INR11.4b. EBITDA was flat y-y
at INR1.2b. EBITDA margin expanded
40bps, due to a lower contribution from
road projects (typically have lower
margins). However, interest costs
increased 118% y-y and were 16% higher
than our estimate. Consequently, net
profit of INR233m was down 44% y-y and
19% below our estimate. The buildings
and housing segment was the largest
contributor to revenue with a 39% share.
Outlook
NCC guided to FY12 revenue of INR72b/ INR59b on a consolidated/
standalone basis. Management expects EBITDA margin to be sustainable
in the 9.5-10.0% range for the full year. Debt for the Krishnapatnam
power project is likely to be tied up in the next 1-2 quarters; the project
requires INR2.0b of further equity infusion (NCC’s portion). The Western
UP Tollway road project became operational in April 2011. The
Pondicherry Tindivanam project should start operations by September
2011. Management indicated that the targeted order inflow for FY12 is
around INR90b.
Valuation
We will revisit our SOTP-based TP of INR133 after incorporating the
1QFY12 result. Our TP includes standalone valuation at INR96/share,
based on 6.5x one-year forward NTM EBITDA (10x implied one-year
forward NTM EPS). Our multiple is at a 10% discount to NCC’s 10-year
historical mean multiple. Power projects contribute INR2/share, based on
1.0x estimated equity investment. Real-estate investments are valued at
0.5x invested equity to arrive at INR13/share contribution. The highway
BOT projects contribute INR22. Risks to our TP include execution risk,
inflationary risk to margins due to raw material price increase, execution
risk in road assets, and interest rate risk.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Operationally in line
Revenue, EBITDA were essentially in line with our estimates
EBITDA margin of 10.2% was 40bps higher than our estimate
Interest cost increased 118% y-y, net profit 19% below estimate
We will revisit estimates after incorporating 1QFY12 results
1QFY12 results
NCC reported in-line revenue and
EBITDA in 1QFY12. Revenue increased
5% y-y to INR11.4b. EBITDA was flat y-y
at INR1.2b. EBITDA margin expanded
40bps, due to a lower contribution from
road projects (typically have lower
margins). However, interest costs
increased 118% y-y and were 16% higher
than our estimate. Consequently, net
profit of INR233m was down 44% y-y and
19% below our estimate. The buildings
and housing segment was the largest
contributor to revenue with a 39% share.
Outlook
NCC guided to FY12 revenue of INR72b/ INR59b on a consolidated/
standalone basis. Management expects EBITDA margin to be sustainable
in the 9.5-10.0% range for the full year. Debt for the Krishnapatnam
power project is likely to be tied up in the next 1-2 quarters; the project
requires INR2.0b of further equity infusion (NCC’s portion). The Western
UP Tollway road project became operational in April 2011. The
Pondicherry Tindivanam project should start operations by September
2011. Management indicated that the targeted order inflow for FY12 is
around INR90b.
Valuation
We will revisit our SOTP-based TP of INR133 after incorporating the
1QFY12 result. Our TP includes standalone valuation at INR96/share,
based on 6.5x one-year forward NTM EBITDA (10x implied one-year
forward NTM EPS). Our multiple is at a 10% discount to NCC’s 10-year
historical mean multiple. Power projects contribute INR2/share, based on
1.0x estimated equity investment. Real-estate investments are valued at
0.5x invested equity to arrive at INR13/share contribution. The highway
BOT projects contribute INR22. Risks to our TP include execution risk,
inflationary risk to margins due to raw material price increase, execution
risk in road assets, and interest rate risk.
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