Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
R o b u s t t o p l i n e g r o w t h c o n t i n u e s …
Alok Industries’ (Alok) Q2FY12 numbers were in line with our estimates.
The company has continued its strong topline growth trend as it enjoys
the benefits of expanded capacities. In Q2FY12, revenues increased by
47.2% YoY to | 2,136.8 crore higher than our estimate of | 1,959.5 crore.
Exports increased by 22.2% YoY to | 740.0 crore. During the quarter, the
company had to make a marked-to-market (MTM) provision (to the tune
of ~ | 100 crore) on account of the recent depreciation of the rupee.
Consequently, the operating margin fell by 438 bps YoY and 323 bps QoQ
to 24.3% (lower than our estimate of 27.2%). Further, higher depreciation
and interest costs ate into the company’s profits and PAT growth was a
muted 2.4%. Despite pressure on the operating front and higher fixed
costs, Alok’s Q2FY12 PAT stood at | 81.7 crore, (I-direct estimate: | 83.5
crore) on the back of higher other income (| 22.5 crore, of which | 10.0
crore came in as a final insurance claim while | 10.0 crore was profit
accrued due to the Silvassa land sale). For the first half ended September
2011, revenues, EBITDA and PAT increased by 48.3%, 30.7% and 10.4%
to | 3,781.7 crore, | 970.7 crore and | 139.5 crore, respectively.
ƒ Real estate monetisation: No announcements; optimism prevails
The company did not make any new announcements regarding
monetisation of the real estate business. However, the management
tone was affirmative and they continued to maintain their guidance
of closing large part of the deals and garnering ~ | 1,400 crore (of
the | 1,800 – 2,000 crore) in the current fiscal.
V a l u a t i o n
After an exceptional FY11, domestic textile players have witnessed a
tough H1FY12. With cotton prices correcting ~35% from peak levels,
some players faced heavy inventory losses. Amid such difficult times,
Alok has maintained consistent topline growth (backed by capacity
expansion) while the bottomline has also grown, albeit at a lower pace
(due to high interest costs). We expect topline and bottomline to grow at
a CAGR of 22.4% and 21.4%, respectively, during FY11-13E. The stock is
currently trading at 3.2x and 2.7x its FY12E and FY13E EPS of | 6.4 and
| 7.6, respectively. We have valued the stock at 3.8x FY13E EPS to arrive
at a target price of | 28. We maintain our BUY rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
R o b u s t t o p l i n e g r o w t h c o n t i n u e s …
Alok Industries’ (Alok) Q2FY12 numbers were in line with our estimates.
The company has continued its strong topline growth trend as it enjoys
the benefits of expanded capacities. In Q2FY12, revenues increased by
47.2% YoY to | 2,136.8 crore higher than our estimate of | 1,959.5 crore.
Exports increased by 22.2% YoY to | 740.0 crore. During the quarter, the
company had to make a marked-to-market (MTM) provision (to the tune
of ~ | 100 crore) on account of the recent depreciation of the rupee.
Consequently, the operating margin fell by 438 bps YoY and 323 bps QoQ
to 24.3% (lower than our estimate of 27.2%). Further, higher depreciation
and interest costs ate into the company’s profits and PAT growth was a
muted 2.4%. Despite pressure on the operating front and higher fixed
costs, Alok’s Q2FY12 PAT stood at | 81.7 crore, (I-direct estimate: | 83.5
crore) on the back of higher other income (| 22.5 crore, of which | 10.0
crore came in as a final insurance claim while | 10.0 crore was profit
accrued due to the Silvassa land sale). For the first half ended September
2011, revenues, EBITDA and PAT increased by 48.3%, 30.7% and 10.4%
to | 3,781.7 crore, | 970.7 crore and | 139.5 crore, respectively.
ƒ Real estate monetisation: No announcements; optimism prevails
The company did not make any new announcements regarding
monetisation of the real estate business. However, the management
tone was affirmative and they continued to maintain their guidance
of closing large part of the deals and garnering ~ | 1,400 crore (of
the | 1,800 – 2,000 crore) in the current fiscal.
V a l u a t i o n
After an exceptional FY11, domestic textile players have witnessed a
tough H1FY12. With cotton prices correcting ~35% from peak levels,
some players faced heavy inventory losses. Amid such difficult times,
Alok has maintained consistent topline growth (backed by capacity
expansion) while the bottomline has also grown, albeit at a lower pace
(due to high interest costs). We expect topline and bottomline to grow at
a CAGR of 22.4% and 21.4%, respectively, during FY11-13E. The stock is
currently trading at 3.2x and 2.7x its FY12E and FY13E EPS of | 6.4 and
| 7.6, respectively. We have valued the stock at 3.8x FY13E EPS to arrive
at a target price of | 28. We maintain our BUY rating on the stock.
No comments:
Post a Comment