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C h a n g e i n a c c o u n t i n g p o l i c y d a m p e n s p r o f i t …
Sanghvi Movers’ (SML) net sales of | 109.9 crore for Q2FY12 were higher
than our estimates. The EBITDA margin of 71.2% was in line with our
estimates. However, the real dampener was the interest cost, which
resulted in a PAT of | 14.5 crore, a 40.8% YoY decline from the reported
PAT of | 24.5 crore in Q2FY11. This high interest cost of | 25.6 crore in
Q2FY12 was mainly on account of a change in the accounting practice for
borrowing cost, which resulted in an additional interest cost with a prior
field impact of | 6.5 crore. SML’s total revenues stood at | 109.9 crore
reflecting a growth of 22.6% YoY and 4.2% QoQ.
ƒ Blended yield and capacity utilisation fall sequentially
The blended yield of 2.83% in Q2FY12 was below Q1FY12 yield of
2.9% mainly on account of higher proportion of new cranes (~ 63%
of gross block). The average utilisation for Q2FY12 dropped to 84%
(86% in Q1FY12), primarily due to higher competition and lower
overtime.
ƒ Windmill sector contributes ~39% of total revenues in H1FY12
In terms of sector wise break-up of revenues for H1FY12, the wind
mill sector contributed 39%, power contributed 30%, refinery and
gas contributed 18%, steel and metal contributed 5%, cement
contributed 4% and other industries contributed 4%.
V a l u a t i o n
Sanghvi Movers has registered strong revenue growth in the past
quarters. However, going ahead, we remain cautious because of the
slowdown in the economy. We have downgraded our FY13E EPS to |
19.4 on account of expected project delays in the steel, power & windmill
sectors. At the current price of | 106, the stock is trading at 5.5x its FY13E
EPS of | 19.4. We recommend a HOLD rating on the stock with a target
price of | 116, 6.0x FY13E EPS.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
C h a n g e i n a c c o u n t i n g p o l i c y d a m p e n s p r o f i t …
Sanghvi Movers’ (SML) net sales of | 109.9 crore for Q2FY12 were higher
than our estimates. The EBITDA margin of 71.2% was in line with our
estimates. However, the real dampener was the interest cost, which
resulted in a PAT of | 14.5 crore, a 40.8% YoY decline from the reported
PAT of | 24.5 crore in Q2FY11. This high interest cost of | 25.6 crore in
Q2FY12 was mainly on account of a change in the accounting practice for
borrowing cost, which resulted in an additional interest cost with a prior
field impact of | 6.5 crore. SML’s total revenues stood at | 109.9 crore
reflecting a growth of 22.6% YoY and 4.2% QoQ.
ƒ Blended yield and capacity utilisation fall sequentially
The blended yield of 2.83% in Q2FY12 was below Q1FY12 yield of
2.9% mainly on account of higher proportion of new cranes (~ 63%
of gross block). The average utilisation for Q2FY12 dropped to 84%
(86% in Q1FY12), primarily due to higher competition and lower
overtime.
ƒ Windmill sector contributes ~39% of total revenues in H1FY12
In terms of sector wise break-up of revenues for H1FY12, the wind
mill sector contributed 39%, power contributed 30%, refinery and
gas contributed 18%, steel and metal contributed 5%, cement
contributed 4% and other industries contributed 4%.
V a l u a t i o n
Sanghvi Movers has registered strong revenue growth in the past
quarters. However, going ahead, we remain cautious because of the
slowdown in the economy. We have downgraded our FY13E EPS to |
19.4 on account of expected project delays in the steel, power & windmill
sectors. At the current price of | 106, the stock is trading at 5.5x its FY13E
EPS of | 19.4. We recommend a HOLD rating on the stock with a target
price of | 116, 6.0x FY13E EPS.
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