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E x e c u t i o n m i s s e s i m p a c t r e s u l t s …
NCC reported disappointing Q2FY12 results led by slower execution,
lower margins and higher interest costs. The company reported a topline
of | 1090 crore in Q2FY12 vs. our estimate of | 1273 crore on account of
weak execution. The reported PAT at | 11.4 crore was lower than our
estimate of | 29.3 crore due to execution miss, lower OPM and higher
interest cost (up ~89% YoY to | 71 crore) during the quarter. The
management has also lowered its FY12 standalone revenue guidance to |
5600 (implying YoY growth of ~20.7% in H2FY12) from | 5900 earlier. We
believe this is still an uphill task considering the H1FY12 performance and
challenging macroeconomic environment. We maintain our BUY rating
with a price target of | 64 per share purely on account of valuation.
ƒ Disappointing performance…
NCC reported a topline of | 1090 crore in Q1FY12 vs. our estimate of |
1273 crore on account of weak execution. The EBITDA margin at 9.5%
in Q1FY12 was lower than our estimates of 10%. The reported PAT at |
11.4 crore was lower than our estimate of | 29.3 crore due to execution
miss, lower OPM and higher interest cost (up ~89% YoY to | 71 crore).
ƒ Guidance for FY12 lowered, still an uphill task…
The management has lowered its standalone revenue guidance to |
5600 crore vs. | 5900 crore guided earlier. We believe that the new
revenue guidance (implying YoY growth of ~20.7% in H2FY12) is an
uphill task given the H1FY12 performance and challenging
macroeconomic environment. Therefore, we have now built in lower
growth of ~10% YoY in H2FY12.
ƒ Order book guidance remains strong…
NCC secured orders worth | 1,736 crore in Q2FY12 to close the order
book at | 16,570 crore at the end of the quarter. The management has
guided for order inflow of | 9,000 crore (ex – Nelcast power project
worth ~| 5,000 crore expected in FY12 only) as it aims to bag road
projects worth ~| 2500 crore from NHAI in FY12.
V a l u a t i o n
At the CMP, the stock is trading at 2.8x FY13E adjusted P/E and 0.5x FY13
P/BV. We maintain our BUY recommendation on the stock with a price
target of | 64 per share purely on account of valuation.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
E x e c u t i o n m i s s e s i m p a c t r e s u l t s …
NCC reported disappointing Q2FY12 results led by slower execution,
lower margins and higher interest costs. The company reported a topline
of | 1090 crore in Q2FY12 vs. our estimate of | 1273 crore on account of
weak execution. The reported PAT at | 11.4 crore was lower than our
estimate of | 29.3 crore due to execution miss, lower OPM and higher
interest cost (up ~89% YoY to | 71 crore) during the quarter. The
management has also lowered its FY12 standalone revenue guidance to |
5600 (implying YoY growth of ~20.7% in H2FY12) from | 5900 earlier. We
believe this is still an uphill task considering the H1FY12 performance and
challenging macroeconomic environment. We maintain our BUY rating
with a price target of | 64 per share purely on account of valuation.
ƒ Disappointing performance…
NCC reported a topline of | 1090 crore in Q1FY12 vs. our estimate of |
1273 crore on account of weak execution. The EBITDA margin at 9.5%
in Q1FY12 was lower than our estimates of 10%. The reported PAT at |
11.4 crore was lower than our estimate of | 29.3 crore due to execution
miss, lower OPM and higher interest cost (up ~89% YoY to | 71 crore).
ƒ Guidance for FY12 lowered, still an uphill task…
The management has lowered its standalone revenue guidance to |
5600 crore vs. | 5900 crore guided earlier. We believe that the new
revenue guidance (implying YoY growth of ~20.7% in H2FY12) is an
uphill task given the H1FY12 performance and challenging
macroeconomic environment. Therefore, we have now built in lower
growth of ~10% YoY in H2FY12.
ƒ Order book guidance remains strong…
NCC secured orders worth | 1,736 crore in Q2FY12 to close the order
book at | 16,570 crore at the end of the quarter. The management has
guided for order inflow of | 9,000 crore (ex – Nelcast power project
worth ~| 5,000 crore expected in FY12 only) as it aims to bag road
projects worth ~| 2500 crore from NHAI in FY12.
V a l u a t i o n
At the CMP, the stock is trading at 2.8x FY13E adjusted P/E and 0.5x FY13
P/BV. We maintain our BUY recommendation on the stock with a price
target of | 64 per share purely on account of valuation.
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