Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
For 2QFY2012, Simplex Infra’s (Simplex) numbers came above our expectations
mainly due to higher top-line growth. At the end of the quarter, the company’s
order book stood at `15,034cr (3.0x FY2011 revenue). Simplex reported order
inflows of `1,949cr for the quarter, up 123.3% qoq and (12.6%) yoy. We have
marginally tweaked our estimates to reflect the weak margins, rising interest rate
scenario, increasing debt levels and weak business environment. However, given
the attractive valuations, we continue to maintain our Buy view on the stock.
Decent show on the numbers front: On the top-line front, Simplex reported
25.7% yoy growth to `1,322cr, higher than our estimate. Revenue growth can
mainly be attributed to 27% business growth on the domestic front, with the
international business lagging behind with 7% growth. EBITDAM dipped by
110bp yoy to 9.0% for the quarter, lower than our estimate, which was also
affected by forex loss of `6.0cr. PAT for the quarter declined by 33.5% yoy to
`17.9cr, above our estimate of `9.6cr.
Outlook and valuation: Simplex is facing slowdown on the international front
and is venturing into newer geographies, leading to stretched working capital
and higher interest cost. Management refrained itself from giving any guidance
and maintained that growth would depend upon the domestic environment.
We are downgrading our target price mainly due to lower PE multiple assigned
to factor in the prolonged problems faced in the business environment, leading
to 1) elongated working capital cycle on account of diversification into newer
geographies and 2) higher interest outflow on account of increased debt levels
and rising interest rates. Our revised target price for the stock is `270 (`299
earlier), based on 9x (earlier 10x) FY2013E earnings. We continue to maintain
our Buy recommendation on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
For 2QFY2012, Simplex Infra’s (Simplex) numbers came above our expectations
mainly due to higher top-line growth. At the end of the quarter, the company’s
order book stood at `15,034cr (3.0x FY2011 revenue). Simplex reported order
inflows of `1,949cr for the quarter, up 123.3% qoq and (12.6%) yoy. We have
marginally tweaked our estimates to reflect the weak margins, rising interest rate
scenario, increasing debt levels and weak business environment. However, given
the attractive valuations, we continue to maintain our Buy view on the stock.
Decent show on the numbers front: On the top-line front, Simplex reported
25.7% yoy growth to `1,322cr, higher than our estimate. Revenue growth can
mainly be attributed to 27% business growth on the domestic front, with the
international business lagging behind with 7% growth. EBITDAM dipped by
110bp yoy to 9.0% for the quarter, lower than our estimate, which was also
affected by forex loss of `6.0cr. PAT for the quarter declined by 33.5% yoy to
`17.9cr, above our estimate of `9.6cr.
Outlook and valuation: Simplex is facing slowdown on the international front
and is venturing into newer geographies, leading to stretched working capital
and higher interest cost. Management refrained itself from giving any guidance
and maintained that growth would depend upon the domestic environment.
We are downgrading our target price mainly due to lower PE multiple assigned
to factor in the prolonged problems faced in the business environment, leading
to 1) elongated working capital cycle on account of diversification into newer
geographies and 2) higher interest outflow on account of increased debt levels
and rising interest rates. Our revised target price for the stock is `270 (`299
earlier), based on 9x (earlier 10x) FY2013E earnings. We continue to maintain
our Buy recommendation on the stock.
No comments:
Post a Comment