14 September 2011

Voltas (VOLT.BO, Buy, PT Rs225, 98% upside) UBS: India Mid-Caps TOP PICKS - September 2011


Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


• Voltas – an Indian MEP contractor and manufacturer of AC and
commercial refrigeration systems. Beneficiary of long-term
structural story, and growing infrastructure spending in India
• Levered to infrastructure projects in the Middle East. Middle
East (ex-Dubai) is expected to be ~ 24% of EBIT in FY12.
Historically (though company doesn’t give break-up), it is
expected at 20-25% of EBIT.
• AC and commercial refrigeration - 25-30% volume CAGR over
the next three to five years
• Significant experience, strong brand, Tata management and
execution ability, strong balance sheet (FY12E/FY13E - net cash)
• Asset-light and flexible business model, International JVs,
landmark projects (Ferrari F1 race track in Abu Dhabi), agency
business highly geared to economic growth
• Only 5-10% of India order book in commercial real estate (ex-IT
parks)
• Shareholding: Promoter 31%
• Valuation: DCF using UBS’s VCAM tool (assume a WACC of
12.5%, terminal sales growth of 5%). Implied FY13E PE – 18x


No comments:

Post a Comment