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S l u g g i s h r e v e n u e g r o w t h d r a g s d o w n p r o f i t s …
Transport Corporation of India’s (TCI) results for Q2FY12 were below our
estimates. Net sales for Q2FY12 stood at | 453 crore, which was higher
by 2.5% YoY against our estimates of | 501.5 crore. The freight business,
which contributes to 43.5% of the company’s topline reported a 2% YoY
decline and stood at | 197.2 crore. The XPS and SCS divisions recorded
slower YoY revenue growth of 4% and 8.6%, respectively, while their net
sales stood at | 122 crore and |107 crore, respectively. The EBITDA
margins remained stable at 8.1% in Q2FY12. The company’s PAT of |
13.8 crore declined 5.1% YoY on account of 33.8% YoY increase in
interest cost, which was | 8.7 crore for Q2FY12.
ƒ Slowdown in growth rate from SCS division
The supply chain solution (SCS) division reported slower growth
during Q2FY12 on account of lower volumes in the auto segment
(auto sector contributes 75% of SCS’ revenue). Revenues from this
division increased 8.6% YoY against 58.7% in FY11.
ƒ Sluggish performance of freight division
The freight division reported a sluggish performance during
Q2FY12. The revenue from this division stood at to | 197.2 crore
while the EBIT margin from this division was maintained at 2.4%.
V a l u a t i o n
In Q2FY12, TCI reported lower growth on the back of a slowdown in the
manufacturing sector. We have revised our revenue and profit growth
target for TCI lower mainly on account of slower growth in the XPS and
SCS divisions. However, we believe these high margin businesses would
have increased contribution in revenues, going forward. At the CMP of |
73, the stock is trading at 9.3x its FY12E EPS of | 7.8 and 8.6x its FY13E
EPS of | 8.5. We have valued the stock at 12x FY13E EPS and arrived at a
target price of | 102.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S l u g g i s h r e v e n u e g r o w t h d r a g s d o w n p r o f i t s …
Transport Corporation of India’s (TCI) results for Q2FY12 were below our
estimates. Net sales for Q2FY12 stood at | 453 crore, which was higher
by 2.5% YoY against our estimates of | 501.5 crore. The freight business,
which contributes to 43.5% of the company’s topline reported a 2% YoY
decline and stood at | 197.2 crore. The XPS and SCS divisions recorded
slower YoY revenue growth of 4% and 8.6%, respectively, while their net
sales stood at | 122 crore and |107 crore, respectively. The EBITDA
margins remained stable at 8.1% in Q2FY12. The company’s PAT of |
13.8 crore declined 5.1% YoY on account of 33.8% YoY increase in
interest cost, which was | 8.7 crore for Q2FY12.
ƒ Slowdown in growth rate from SCS division
The supply chain solution (SCS) division reported slower growth
during Q2FY12 on account of lower volumes in the auto segment
(auto sector contributes 75% of SCS’ revenue). Revenues from this
division increased 8.6% YoY against 58.7% in FY11.
ƒ Sluggish performance of freight division
The freight division reported a sluggish performance during
Q2FY12. The revenue from this division stood at to | 197.2 crore
while the EBIT margin from this division was maintained at 2.4%.
V a l u a t i o n
In Q2FY12, TCI reported lower growth on the back of a slowdown in the
manufacturing sector. We have revised our revenue and profit growth
target for TCI lower mainly on account of slower growth in the XPS and
SCS divisions. However, we believe these high margin businesses would
have increased contribution in revenues, going forward. At the CMP of |
73, the stock is trading at 9.3x its FY12E EPS of | 7.8 and 8.6x its FY13E
EPS of | 8.5. We have valued the stock at 12x FY13E EPS and arrived at a
target price of | 102.
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