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Results inline: Forex gain, one time lower tax aided earnings.
Revenues: in Q2FY12 grew by 6.4% QoQ, and 27.4% YoY at Rs.238.2crores on the back of depreciated rupee. Contribution from life sciences segment grew to 10.6% in Q2FY12 from 9.9% in the previous quarter.
EBIDTA margins: improved by 130bps qoq to 18.7% on the back of lower operating expenses which were lower by 190bps qoq.
Currency impact on the EBIDTA was of 1.9%.
Earnings: grew by 18% QoQ to Rs.32.4 crore, mainly because of lower taxes due to one-offs and forex gain.
IP-led revenues: contributed 7.6% to the revenues during the quarter against 6.10%. Management expects good phillip to these revenues in the coming quarters. During the quarter, technical time spent in IP business stood at 5.5% (growth of 80 bps QoQ).
During the quarter, small clients saw good gain at 211 clients reflecting overall global mood whereby smaller projects are getting executed faster and larger clients are delaying decisions.
Onsite billing rates saw a decline of 2.8% at USD 12665 p/pm whereas offshore rates have remained flat at USD 3771 p/pm.
During the quarter, utilization excluding trainees and freshers improved to 73.8%, a growth of 110 bps QoQ. Attrition rate remained under control at 17.7%.
Guidance:
Company has mainted earlier guidance of $ 220mn on revenues and preferred not to comment given the unstable world economy.
Valuation & Recommendations
PSL has grown better than expected during the first half of FY12E. While one off items and forex gain has aided to PSL’s earnings, we believe the company’s second half performance depends upon how sound its IP investments pays-off in the coming quarters. We revise our earnings estimate by 6.5% upwards to 136.7 crores for FY12E, thus an EPS estimate of Rs.34.2 for FY12E (flat YoY). We had recommended PSL at Rs314 in the month of Sep’ 11. We maintain Buy with our earlier target price of Rs.387 which has a upside of 20% from current levels. At CMP, the stock is trading at 9.5x and 8.1x for FY12E and FY13E respectively.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Results inline: Forex gain, one time lower tax aided earnings.
Revenues: in Q2FY12 grew by 6.4% QoQ, and 27.4% YoY at Rs.238.2crores on the back of depreciated rupee. Contribution from life sciences segment grew to 10.6% in Q2FY12 from 9.9% in the previous quarter.
EBIDTA margins: improved by 130bps qoq to 18.7% on the back of lower operating expenses which were lower by 190bps qoq.
Currency impact on the EBIDTA was of 1.9%.
Earnings: grew by 18% QoQ to Rs.32.4 crore, mainly because of lower taxes due to one-offs and forex gain.
IP-led revenues: contributed 7.6% to the revenues during the quarter against 6.10%. Management expects good phillip to these revenues in the coming quarters. During the quarter, technical time spent in IP business stood at 5.5% (growth of 80 bps QoQ).
During the quarter, small clients saw good gain at 211 clients reflecting overall global mood whereby smaller projects are getting executed faster and larger clients are delaying decisions.
Onsite billing rates saw a decline of 2.8% at USD 12665 p/pm whereas offshore rates have remained flat at USD 3771 p/pm.
During the quarter, utilization excluding trainees and freshers improved to 73.8%, a growth of 110 bps QoQ. Attrition rate remained under control at 17.7%.
Guidance:
Company has mainted earlier guidance of $ 220mn on revenues and preferred not to comment given the unstable world economy.
Valuation & Recommendations
PSL has grown better than expected during the first half of FY12E. While one off items and forex gain has aided to PSL’s earnings, we believe the company’s second half performance depends upon how sound its IP investments pays-off in the coming quarters. We revise our earnings estimate by 6.5% upwards to 136.7 crores for FY12E, thus an EPS estimate of Rs.34.2 for FY12E (flat YoY). We had recommended PSL at Rs314 in the month of Sep’ 11. We maintain Buy with our earlier target price of Rs.387 which has a upside of 20% from current levels. At CMP, the stock is trading at 9.5x and 8.1x for FY12E and FY13E respectively.
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