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Sintex Industries (SNTX.BO)
Buy Equity Research
In line with expectation; MTM loss result in lower PAT; still CL-Buy
What surprised us
Sintex reported Q2FY12 revenue of Rs11.6bn, in line with our and Bloomberg
consensus estimates, implying 25% yoy growth. EBITDA for the same period
came in at Rs2.04bn (17.7% margin), also in line with our and consensus
estimates. PAT for the quarter was negatively impacted by non-cash mark to
market forex losses of Rs596mn on the company’s FCCB debt outstanding
resulting in quarterly profit of Rs388mn vs. GSe of Rs1,127mn. The company
continued to report strong growth in the building materials and custom
mouldings segments (22.5%/29% respectively). This is Sintex’s seventh
consecutive quarter of +20% yoy revenue growth.
What to do with the stock
We forecast sales CAGR of 17% over FY11-13E, with the monolithic and social
pre-fabs segments being the key contributors, growing at 26%. We incorporate
the forex loss in our EPS for FY12E and reduce EPS for the year by 18%. Our
FY13-14E EPS are changing by less than 0.5%. As highlighted in our Oct. 2
report Market concerns on forex debt overdone; reiterate CL-Buy, this forex loss
has no cash impact and we already incorporate the repayment of FCCB in Mar-
13 at Rs50 conversion rate in our estimates.
Sintex currently trades at 4.8X FY13E P/E vs. 5-year median 12-m fwd P/E of
10.7X. These valuations are attractive in our view, given our forecast of a 20%
EPS CAGR and a high ROE of 18-20% over FY11-13E for the company. We
maintain our Buy rating (on CL) on the stock and reduce our P/E-based 12-m TP
to Rs214 (from Rs225) – based on a lower normalized EPS. Key risks include 1)
Execution delays in the monolithic construction segment, 2) Volatile raw
material prices
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sintex Industries (SNTX.BO)
Buy Equity Research
In line with expectation; MTM loss result in lower PAT; still CL-Buy
What surprised us
Sintex reported Q2FY12 revenue of Rs11.6bn, in line with our and Bloomberg
consensus estimates, implying 25% yoy growth. EBITDA for the same period
came in at Rs2.04bn (17.7% margin), also in line with our and consensus
estimates. PAT for the quarter was negatively impacted by non-cash mark to
market forex losses of Rs596mn on the company’s FCCB debt outstanding
resulting in quarterly profit of Rs388mn vs. GSe of Rs1,127mn. The company
continued to report strong growth in the building materials and custom
mouldings segments (22.5%/29% respectively). This is Sintex’s seventh
consecutive quarter of +20% yoy revenue growth.
What to do with the stock
We forecast sales CAGR of 17% over FY11-13E, with the monolithic and social
pre-fabs segments being the key contributors, growing at 26%. We incorporate
the forex loss in our EPS for FY12E and reduce EPS for the year by 18%. Our
FY13-14E EPS are changing by less than 0.5%. As highlighted in our Oct. 2
report Market concerns on forex debt overdone; reiterate CL-Buy, this forex loss
has no cash impact and we already incorporate the repayment of FCCB in Mar-
13 at Rs50 conversion rate in our estimates.
Sintex currently trades at 4.8X FY13E P/E vs. 5-year median 12-m fwd P/E of
10.7X. These valuations are attractive in our view, given our forecast of a 20%
EPS CAGR and a high ROE of 18-20% over FY11-13E for the company. We
maintain our Buy rating (on CL) on the stock and reduce our P/E-based 12-m TP
to Rs214 (from Rs225) – based on a lower normalized EPS. Key risks include 1)
Execution delays in the monolithic construction segment, 2) Volatile raw
material prices
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