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J KUMAR INFRAPROJECTS LTD
PRICE: RS.148 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.156 FY13E P/E: 4.7X
Result highlights: Revenue growth was in line with our estimates and is
expected to improve going forward. Order inflow has jumped up from
October onwards. Margins stood better than expectations and boosted net
profit growth during Q2FY12. We maintain ACCUMULATE on the stock.
q Revenues for Q2FY12 reported a growth of 9% YoY, in line with our expectations.
Sequentially, the performance of the company was impacted
by monsoons.
q Margins stood at 17.1% for Q2FY12 vis-à-vis 15.9% for Q2FY11 which resulted
in boosting net profit growth.
q At current price of Rs 148, stock is trading at 5.5x and 4.7x P/E and 2.5x
and 2.2x EV/EBITDA multiples for FY12 and FY13 respectively. Order inflow
for the company has started witnessing improvement enhancing
the revenue visibility for the company. We thus introduce FY13 estimates
and roll forward our price target on FY13 estimates. We arrive at a revised
price target of Rs 156 (Rs 135 earlier) and continue to maintain ACCUMULATE
on the stock.
Revenue growth in line with our estimates
n Revenues for Q2FY12 reported a growth of 9% YoY, in line with our expectations.
Sequentially, the performance of the company was impacted by monsoons.
n Order book of the company stands at approximately Rs 20 bn after company
bagged orders worth Rs 9.3 bn during Q3FY12. Order inflow till H1FY12 remained
lower than our estimates. However it has started witnessing an improvement.
n Key orders bagged recently by the company include order worth Rs 6 bn for widening
and Improvement to Sion-Panvel Special State Highway (Under BOT) while
remaining orders are diversified across transportation and civil.
n Company has indicated that L1 status has improved across various locations such
as Rajasthan, Delhi, Navi Mumbai as well as Haryana. Till last year, JKIL's order
book was predominantly coming from transportation segment and mainly from
Maharashtra while now company is trying to diversify its presence across other
locations as well as segments.
n With the recent order wins, company's order book provides an enhanced visibility
of 1.5 years. We thus introduce FY13 estimates and expect revenues to grow at
a CAGR of 13.7% between FY11-FY13.
Operating margins witnessed an improvement due to stock adjustment
n Margins stood at 17.1% for Q2FY12 vis-à-vis 15.9% for Q2FY11 due to stock
adjustment.
n We maintain our estimates and expect margins to be 15% for FY12. However,
we expect margins to decline to 14.5% for FY13 to factor in higher competition
in recently awarded bids.
Net profit growth led by improvement in margins
n Net profit growth of the company stood at 10% YoY and was led by improvement
in operating margins.
n However, interest and depreciation charges witnessed an increase due to increase
in overall borrowings as well as capex. Working capital of the company
has also increased which resulted in higher borrowings. We expect interest
charges to remain high going forward due to increased bidding activity by the
company as well as higher interest rates on its working capital requirements.
n We maintain our estimates for FY12 and introduce FY13 estimates. We thus expect
net profits to grow at a CAGR of 10.4% between FY11-FY13.
Valuation and recommendation
n At current price of Rs 148, stock is trading at 5.5x and 4.7x P/E and 2.5x and
2.2x EV/EBITDA multiples for FY12 and FY13 respectively.
n Order inflow for the company has started witnessing improvement enhancing the
revenue visibility for the company.
n We thus introduce FY13 estimates and roll forward our price target on FY13 estimates.
We arrive at a revised price target of Rs 156 (Rs 135 earlier) and continue
to maintain ACCUMULATE on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
J KUMAR INFRAPROJECTS LTD
PRICE: RS.148 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.156 FY13E P/E: 4.7X
Result highlights: Revenue growth was in line with our estimates and is
expected to improve going forward. Order inflow has jumped up from
October onwards. Margins stood better than expectations and boosted net
profit growth during Q2FY12. We maintain ACCUMULATE on the stock.
q Revenues for Q2FY12 reported a growth of 9% YoY, in line with our expectations.
Sequentially, the performance of the company was impacted
by monsoons.
q Margins stood at 17.1% for Q2FY12 vis-à-vis 15.9% for Q2FY11 which resulted
in boosting net profit growth.
q At current price of Rs 148, stock is trading at 5.5x and 4.7x P/E and 2.5x
and 2.2x EV/EBITDA multiples for FY12 and FY13 respectively. Order inflow
for the company has started witnessing improvement enhancing
the revenue visibility for the company. We thus introduce FY13 estimates
and roll forward our price target on FY13 estimates. We arrive at a revised
price target of Rs 156 (Rs 135 earlier) and continue to maintain ACCUMULATE
on the stock.
Revenue growth in line with our estimates
n Revenues for Q2FY12 reported a growth of 9% YoY, in line with our expectations.
Sequentially, the performance of the company was impacted by monsoons.
n Order book of the company stands at approximately Rs 20 bn after company
bagged orders worth Rs 9.3 bn during Q3FY12. Order inflow till H1FY12 remained
lower than our estimates. However it has started witnessing an improvement.
n Key orders bagged recently by the company include order worth Rs 6 bn for widening
and Improvement to Sion-Panvel Special State Highway (Under BOT) while
remaining orders are diversified across transportation and civil.
n Company has indicated that L1 status has improved across various locations such
as Rajasthan, Delhi, Navi Mumbai as well as Haryana. Till last year, JKIL's order
book was predominantly coming from transportation segment and mainly from
Maharashtra while now company is trying to diversify its presence across other
locations as well as segments.
n With the recent order wins, company's order book provides an enhanced visibility
of 1.5 years. We thus introduce FY13 estimates and expect revenues to grow at
a CAGR of 13.7% between FY11-FY13.
Operating margins witnessed an improvement due to stock adjustment
n Margins stood at 17.1% for Q2FY12 vis-à-vis 15.9% for Q2FY11 due to stock
adjustment.
n We maintain our estimates and expect margins to be 15% for FY12. However,
we expect margins to decline to 14.5% for FY13 to factor in higher competition
in recently awarded bids.
Net profit growth led by improvement in margins
n Net profit growth of the company stood at 10% YoY and was led by improvement
in operating margins.
n However, interest and depreciation charges witnessed an increase due to increase
in overall borrowings as well as capex. Working capital of the company
has also increased which resulted in higher borrowings. We expect interest
charges to remain high going forward due to increased bidding activity by the
company as well as higher interest rates on its working capital requirements.
n We maintain our estimates for FY12 and introduce FY13 estimates. We thus expect
net profits to grow at a CAGR of 10.4% between FY11-FY13.
Valuation and recommendation
n At current price of Rs 148, stock is trading at 5.5x and 4.7x P/E and 2.5x and
2.2x EV/EBITDA multiples for FY12 and FY13 respectively.
n Order inflow for the company has started witnessing improvement enhancing the
revenue visibility for the company.
n We thus introduce FY13 estimates and roll forward our price target on FY13 estimates.
We arrive at a revised price target of Rs 156 (Rs 135 earlier) and continue
to maintain ACCUMULATE on the stock.
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