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Result Previews
BHEL
BHEL is scheduled to announce its 2QFY2012 results. The company’s top line is
expected to grow by 19.3% yoy to `10,129cr for 2QFY2012, driven by its strong
order book of ~`1.6tn, which provides robust revenue visibility for the next couple
of years. On the EBITDA front, BHEL's margin is expected to remain stable at
18.5%. The bottom line is expected to post decent growth of 13.9% yoy to
`1,301cr. We remain Neutral on the stock.
Mahindra and Mahindra
Mahindra and Mahindra (MM) is slated to announce its 2QFY2012 results. We
expect the company’s top line to grow by robust 39% yoy to `7,385cr, backed by
an impressive 30% yoy growth in its total volumes. The company’s EBITDA margin
is expected to witness a decline of 295bp yoy to 13.5%. However, we expect the
bottom line to increase by 10% yoy to `832cr. The stock rating is under review.
Tata Motors
Tata Motors (TTMT) is slated to announce its 2QFY2012 results. On a consolidated
basis, we expect the company’s top line to grow strongly by 21% yoy to `34,581cr,
led by robust 23% yoy growth in JLR volumes. The company’s EBITDA margin is
expected to contract by 170bp yoy to 12.2% due to input cost pressures. As a
result, the bottom line is expected to register a decline of 11.2% yoy `1,973cr. The
stock rating is under review.
Cipla
Cipla is slated to announce its 2QFY2012 results. We expect the company’s top
line to grow by 18.6% yoy to `1,7421cr. The company’s EBITDA margin is
expected to expand by 130bp yoy to 22.3%. As a result, the bottom line is
expected to register a growth of 13% yoy `297cr. We maintain a Buy on the stock
with a target price of `377.
Jaiprakash Associates
We expect Jaiprakash Associates (JAL) to post muted top-line growth of 0.8% yoy
to `3,097cr (`3,071cr) for the quarter. We expect a decline of 22.9% in C&EPC
revenue to `1,211cr. On the cement front, we expect JAL to post revenue of
`1,4780cr – volume of 4.2mt with realization of `3,527/tonne for the quarter.
The real estate sector is expected to post top-line growth of 10% to `355.6cr.
Overall, we expect the company to post EBITDA margin of 23.3%, a dip of 140bp
yoy for the quarter. The bottom line is expected to be at `69.3cr, registering a yoy
decline of 40.0% for the quarter. This is on account of a 38.5% expected jump in
interest cost to `447.7cr (`323.4cr).
We have valued JAL’s cement business at 6.0x EV/EBITDA (`62.2/share) and its
construction division at FY2013E target EV/EBITDA multiple of 6.0x (`31.3/share).
We have valued its power and real estate businesses on market cap basis (giving
15% holding company discount), contributing `57.6/share to our target price.
Treasury shares (`6.5/share) have been valued at the current market price,
whereas net debt is accounted for on a per share basis in our valuation at `72.4.
We recommend Accumulate on the stock with an SOTP target price of `85.
Areva T&D
For 3QCY2011, Areva T&D is expected to post moderate top-line growth of 10.1%
yoy to `1,153cr mainly on account of high base (Areva in 3QCY2010 posted
39.5% yoy growth). Further, the delay in large projects is likely to keep revenue
growth under check. Lower volumes and pricing pressure in the T&D segment are
expected to dent the company’s EBITDA margin by ~470bp yoy to 8.0%. Against
this backdrop, the bottom line is expected to decline by 43.9% yoy to `35.3cr.
We remain Neutral on the stock.
India Cements
India Cements is expected to announce its 2QFY2012 results. We expect the
company’s top line to grow by 20.4% yoy to `1,013cr, primarily on account of
higher yoy realization on a low base (as the company is primarily a south-based
player and cement prices had collapsed in South India during 2QFY2011).
On the operating front, the company’s margin is expected to improve by 1,157bp
yoy to 15.2%, aided by higher realization. The company is expected report net
profit of `31cr vs. net loss of `34cr in 2QFY2011. We maintain our Neutral rating
on the stock.
BGR Energy
For 2QFY2012, BGR Energy’s (BGR) top line is expected to be under pressure,
as was the case in the first quarter, due to high base created in 1HFY2011 and dry
spell of order booking over the last few quarters. The top line is expected to decline
by 9.9% yoy to `1,023cr. EBITDA margin is expected to be flat at 11.8%. Also,
increased interest cost (owing to hike in interest rates and enhanced working
capital debt levels) is likely to drag the bottom line further and post a decline of
14.1% to `66.8cr. We remain Neutral on the stock.
Simplex Infra
For 2QFY2012, we expect Simplex Infra to report flat top line of `1,051cr. This
subdued performance would mainly be on account of slowdown faced by the
company on the international front. We expect the company’s EBITDA margin to
remain stable at 10.1%, in-line with management's guidance. However, the bottom
line is expected to be under pressure due to increased interest cost (yoy expected
jump of ~73.3%), resulting in a yoy decline of around 64.4% to `9.6cr for the
quarter. We maintain our Buy rating on the stock with a target price of `299.
Madhucon Projects
Madhucon Projects (MPL) is expected to post flat top-line growth of 1.5% yoy to
`356.9cr for 2QFY2012. We expect the company’s EBITDA margin to improve,
given that its margin was low in 2QFY2011, and register a yoy increase of
~100bp to 10.6%. The company’s earnings are expected to be under pressure on
account of higher interest cost for the quarter and are expected to post a decline of
52.4% yoy to `3.2cr. We maintain our Buy recommendation on the stock with an
SOTP-based target price of `106.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Result Previews
BHEL
BHEL is scheduled to announce its 2QFY2012 results. The company’s top line is
expected to grow by 19.3% yoy to `10,129cr for 2QFY2012, driven by its strong
order book of ~`1.6tn, which provides robust revenue visibility for the next couple
of years. On the EBITDA front, BHEL's margin is expected to remain stable at
18.5%. The bottom line is expected to post decent growth of 13.9% yoy to
`1,301cr. We remain Neutral on the stock.
Mahindra and Mahindra
Mahindra and Mahindra (MM) is slated to announce its 2QFY2012 results. We
expect the company’s top line to grow by robust 39% yoy to `7,385cr, backed by
an impressive 30% yoy growth in its total volumes. The company’s EBITDA margin
is expected to witness a decline of 295bp yoy to 13.5%. However, we expect the
bottom line to increase by 10% yoy to `832cr. The stock rating is under review.
Tata Motors
Tata Motors (TTMT) is slated to announce its 2QFY2012 results. On a consolidated
basis, we expect the company’s top line to grow strongly by 21% yoy to `34,581cr,
led by robust 23% yoy growth in JLR volumes. The company’s EBITDA margin is
expected to contract by 170bp yoy to 12.2% due to input cost pressures. As a
result, the bottom line is expected to register a decline of 11.2% yoy `1,973cr. The
stock rating is under review.
Cipla
Cipla is slated to announce its 2QFY2012 results. We expect the company’s top
line to grow by 18.6% yoy to `1,7421cr. The company’s EBITDA margin is
expected to expand by 130bp yoy to 22.3%. As a result, the bottom line is
expected to register a growth of 13% yoy `297cr. We maintain a Buy on the stock
with a target price of `377.
Jaiprakash Associates
We expect Jaiprakash Associates (JAL) to post muted top-line growth of 0.8% yoy
to `3,097cr (`3,071cr) for the quarter. We expect a decline of 22.9% in C&EPC
revenue to `1,211cr. On the cement front, we expect JAL to post revenue of
`1,4780cr – volume of 4.2mt with realization of `3,527/tonne for the quarter.
The real estate sector is expected to post top-line growth of 10% to `355.6cr.
Overall, we expect the company to post EBITDA margin of 23.3%, a dip of 140bp
yoy for the quarter. The bottom line is expected to be at `69.3cr, registering a yoy
decline of 40.0% for the quarter. This is on account of a 38.5% expected jump in
interest cost to `447.7cr (`323.4cr).
We have valued JAL’s cement business at 6.0x EV/EBITDA (`62.2/share) and its
construction division at FY2013E target EV/EBITDA multiple of 6.0x (`31.3/share).
We have valued its power and real estate businesses on market cap basis (giving
15% holding company discount), contributing `57.6/share to our target price.
Treasury shares (`6.5/share) have been valued at the current market price,
whereas net debt is accounted for on a per share basis in our valuation at `72.4.
We recommend Accumulate on the stock with an SOTP target price of `85.
Areva T&D
For 3QCY2011, Areva T&D is expected to post moderate top-line growth of 10.1%
yoy to `1,153cr mainly on account of high base (Areva in 3QCY2010 posted
39.5% yoy growth). Further, the delay in large projects is likely to keep revenue
growth under check. Lower volumes and pricing pressure in the T&D segment are
expected to dent the company’s EBITDA margin by ~470bp yoy to 8.0%. Against
this backdrop, the bottom line is expected to decline by 43.9% yoy to `35.3cr.
We remain Neutral on the stock.
India Cements
India Cements is expected to announce its 2QFY2012 results. We expect the
company’s top line to grow by 20.4% yoy to `1,013cr, primarily on account of
higher yoy realization on a low base (as the company is primarily a south-based
player and cement prices had collapsed in South India during 2QFY2011).
On the operating front, the company’s margin is expected to improve by 1,157bp
yoy to 15.2%, aided by higher realization. The company is expected report net
profit of `31cr vs. net loss of `34cr in 2QFY2011. We maintain our Neutral rating
on the stock.
BGR Energy
For 2QFY2012, BGR Energy’s (BGR) top line is expected to be under pressure,
as was the case in the first quarter, due to high base created in 1HFY2011 and dry
spell of order booking over the last few quarters. The top line is expected to decline
by 9.9% yoy to `1,023cr. EBITDA margin is expected to be flat at 11.8%. Also,
increased interest cost (owing to hike in interest rates and enhanced working
capital debt levels) is likely to drag the bottom line further and post a decline of
14.1% to `66.8cr. We remain Neutral on the stock.
Simplex Infra
For 2QFY2012, we expect Simplex Infra to report flat top line of `1,051cr. This
subdued performance would mainly be on account of slowdown faced by the
company on the international front. We expect the company’s EBITDA margin to
remain stable at 10.1%, in-line with management's guidance. However, the bottom
line is expected to be under pressure due to increased interest cost (yoy expected
jump of ~73.3%), resulting in a yoy decline of around 64.4% to `9.6cr for the
quarter. We maintain our Buy rating on the stock with a target price of `299.
Madhucon Projects
Madhucon Projects (MPL) is expected to post flat top-line growth of 1.5% yoy to
`356.9cr for 2QFY2012. We expect the company’s EBITDA margin to improve,
given that its margin was low in 2QFY2011, and register a yoy increase of
~100bp to 10.6%. The company’s earnings are expected to be under pressure on
account of higher interest cost for the quarter and are expected to post a decline of
52.4% yoy to `3.2cr. We maintain our Buy recommendation on the stock with an
SOTP-based target price of `106.
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