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Jyoti Structures
Jyoti Structures (JSL) announced its 2QFY2012 results, which were in-line on the
top-line front. However, results were lower than our and street estimates on the
bottom line front. The top line grew by 16.5% yoy to `632.1cr, which was higher
by 2.2% from our estimate of `618.3cr. However, EBITDA margin declined by
~90bp yoy to 10.8%, slightly higher than our estimate of 11.1%, primarily driven
by higher sub-contracting expenses and other expenses rising by ~220bp yoy to
19.5% and 140bp yoy to 9.6%, respectively, as a proportion of sales. Profitability
was further impacted by high interest expenses, which soared by 49.5% yoy
to `31cr. This resulted into PAT declining by 10.9% yoy to `22.1cr, against our
estimate of `25.2cr.
The earnings miss of 2QFY2012 does not warrant for the company’s poor
performance. At the CMP, the stock trades cheaply at 4.5x and 4.0x, FY2012E and
FY2013E, EPS, respectively. The pessimism viz. high interest expenses, low
profitability and elongated working capital cycle has clearly factored in the stock’s
performance. However, we believe the concerns are overly worried, given that JSL
is sailing smooth in terms of growth trajectory (comfortable OB/sales ratio of 1.8x
FY2012E sales). In addition, recent commentary from PGCIL indicated strong
ordering in the near term, which suggests a revival in the T&D space.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jyoti Structures
Jyoti Structures (JSL) announced its 2QFY2012 results, which were in-line on the
top-line front. However, results were lower than our and street estimates on the
bottom line front. The top line grew by 16.5% yoy to `632.1cr, which was higher
by 2.2% from our estimate of `618.3cr. However, EBITDA margin declined by
~90bp yoy to 10.8%, slightly higher than our estimate of 11.1%, primarily driven
by higher sub-contracting expenses and other expenses rising by ~220bp yoy to
19.5% and 140bp yoy to 9.6%, respectively, as a proportion of sales. Profitability
was further impacted by high interest expenses, which soared by 49.5% yoy
to `31cr. This resulted into PAT declining by 10.9% yoy to `22.1cr, against our
estimate of `25.2cr.
The earnings miss of 2QFY2012 does not warrant for the company’s poor
performance. At the CMP, the stock trades cheaply at 4.5x and 4.0x, FY2012E and
FY2013E, EPS, respectively. The pessimism viz. high interest expenses, low
profitability and elongated working capital cycle has clearly factored in the stock’s
performance. However, we believe the concerns are overly worried, given that JSL
is sailing smooth in terms of growth trajectory (comfortable OB/sales ratio of 1.8x
FY2012E sales). In addition, recent commentary from PGCIL indicated strong
ordering in the near term, which suggests a revival in the T&D space.
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