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Punj Lloyd (PUNJ)
Construction
Results broadly in line with expectations. Punj reported another quarter of stable
business with strong revenue growth of 31% (to Rs22.6 bn on a low base) and EBITDA
margin of 8% (in line). PBT was positive at Rs89 mn versus a loss of Rs69 mn in 1Q.
Order inflows at Rs56 bn, primarily from oil & gas, led to a 1QFY12-end backlog of
Rs228 bn. However, high WCap and debt as well as execution risk (assets in Libya,
margins) persist. Revise estimates, retain REDUCE with a revised TP (Rs65, 8XFY13 P/E).
Strong revenue growth on low base slightly ahead of estimates; margin in line
�� Strong revenue growth of 30.5% yoy, ahead of estimates: Punj Lloyd reported strong
1QFY12 consolidated revenue growth of 30.5% yoy to Rs22.6 bn, about 8% ahead of our
estimate. The strong revenue growth was primarily on a low base of 1QFY12, which had
witnessed a 42% yoy decline
�� EBITDA margin at 8%, broadly in line: EBITDA margin expanded marginally by 30 bps yoy to
8%, in line with our estimate
�� About 17% ahead of estimates at PBT level; high taxes lead to net loss of Rs127 mn:
Punj reported a PBT of Rs89 mn, about 17% ahead of our estimate and versus a loss of Rs69
mn in 1QFY11. High tax expenses of Rs216 mn led to a net loss of Rs127 mn versus a net loss
of Rs304 mn in 1QFY11
�� Strong yoy standalone numbers: Punj Lloyd also reported strong standalone results with
revenue growth of 21% (to Rs13.5 bn), 340 bps yoy EBITDA margin expansion (to 11.4%) and
positive net PAT of Rs54 mn (versus a loss of Rs185 mn in 1QFY11).
Strong inflows of Rs56 bn led by O&G segment; though note execution risk to existing Libyan orders
Punj Lloyd reported very strong order inflows of Rs56 bn in 1QFY12. This is versus Rs100 bn of
order inflows reported in the whole of FY2011. The order inflows were led by the oil & gas
segment, especially a single large pipe-laying order worth Rs21 bn. Strong order inflows led to a
1QFY12-end backlog of Rs239 bn, about 5% higher than the FY2011-end backlog of Rs228 bn.
Note that the company had removed inactive projects to the tune of about Rs62.5 bn from the
backlog in the previous quarter. We note that the company still has outstanding orders to the tune
of Rs37 bn (about 16% of the backlog) in Libya which may face several delays.
Revise estimates; retain REDUCE with a target price of Rs65/share
We revise estimates to Rs5.5 and Rs7.4 for FY2012E and FY2013E and revise our TP to Rs65
(based on 8X FY2013 P/E). Retain REDUCE on (1) significant debt and working capital, (2)
potential issues in recovering assets deployed in Libyan projects, (3) execution and margin risks.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Punj Lloyd (PUNJ)
Construction
Results broadly in line with expectations. Punj reported another quarter of stable
business with strong revenue growth of 31% (to Rs22.6 bn on a low base) and EBITDA
margin of 8% (in line). PBT was positive at Rs89 mn versus a loss of Rs69 mn in 1Q.
Order inflows at Rs56 bn, primarily from oil & gas, led to a 1QFY12-end backlog of
Rs228 bn. However, high WCap and debt as well as execution risk (assets in Libya,
margins) persist. Revise estimates, retain REDUCE with a revised TP (Rs65, 8XFY13 P/E).
Strong revenue growth on low base slightly ahead of estimates; margin in line
�� Strong revenue growth of 30.5% yoy, ahead of estimates: Punj Lloyd reported strong
1QFY12 consolidated revenue growth of 30.5% yoy to Rs22.6 bn, about 8% ahead of our
estimate. The strong revenue growth was primarily on a low base of 1QFY12, which had
witnessed a 42% yoy decline
�� EBITDA margin at 8%, broadly in line: EBITDA margin expanded marginally by 30 bps yoy to
8%, in line with our estimate
�� About 17% ahead of estimates at PBT level; high taxes lead to net loss of Rs127 mn:
Punj reported a PBT of Rs89 mn, about 17% ahead of our estimate and versus a loss of Rs69
mn in 1QFY11. High tax expenses of Rs216 mn led to a net loss of Rs127 mn versus a net loss
of Rs304 mn in 1QFY11
�� Strong yoy standalone numbers: Punj Lloyd also reported strong standalone results with
revenue growth of 21% (to Rs13.5 bn), 340 bps yoy EBITDA margin expansion (to 11.4%) and
positive net PAT of Rs54 mn (versus a loss of Rs185 mn in 1QFY11).
Strong inflows of Rs56 bn led by O&G segment; though note execution risk to existing Libyan orders
Punj Lloyd reported very strong order inflows of Rs56 bn in 1QFY12. This is versus Rs100 bn of
order inflows reported in the whole of FY2011. The order inflows were led by the oil & gas
segment, especially a single large pipe-laying order worth Rs21 bn. Strong order inflows led to a
1QFY12-end backlog of Rs239 bn, about 5% higher than the FY2011-end backlog of Rs228 bn.
Note that the company had removed inactive projects to the tune of about Rs62.5 bn from the
backlog in the previous quarter. We note that the company still has outstanding orders to the tune
of Rs37 bn (about 16% of the backlog) in Libya which may face several delays.
Revise estimates; retain REDUCE with a target price of Rs65/share
We revise estimates to Rs5.5 and Rs7.4 for FY2012E and FY2013E and revise our TP to Rs65
(based on 8X FY2013 P/E). Retain REDUCE on (1) significant debt and working capital, (2)
potential issues in recovering assets deployed in Libyan projects, (3) execution and margin risks.
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