Sintex Industries - APAT miss due to monolithic and lower other income ::Emkay

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Sintex Industries Ltd

APAT miss due to monolithic and lower other income

BUY

CMP: Rs 118                                       Target Price: Rs 150

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n     Sintex’s 2Q12 APAT was lower than est. due to lower monolithic execution (16% growth) and lower other income (by about Rs80mn); also the forex loss was higher at Rs596mn vs. est. of Rs450mn

n     Mgmt in the concall sort of maintained its FY12E guidance of 20-25% revenue growth, EBITDA margins at FY11 level and APAT growth of 25-30%

n     Working capital cycle has increased; Capex figure as per balance sheet is about Rs3.1bn for 1H vs. our assumption of Rs3.2bn for full yr. We increase our FY12 capex to Rs5bn – leading to negative free cash flows in FY12  

n     Estimates cut by 10% for FY12/13E mainly driven by lower monolithic, higher capex. Current valuations pricing in negative free cash. Maintain buy with revised TP of Rs150/Share