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N o o r d e r v i s i b i l i t y … .
Bharati Shipyard (BSL) reported a QoQ topline growth of 5.8% to | 465.2
crore in Q2FY12 mainly on account of higher subsidy income booked
during the quarter. The company booked subsidy to the tune of | 107
crore as against | 74 crore in Q1FY12. The EBITDA margin excluding
subsidy improved 40 bps to 18.7%. BSL has been able to report a profit
of | 23.5 crore mainly on account of subsidy income. The company’s total
order book and order book pending execution has declined by 8% and
55% to | 3913 crore and | 287 crore, respectively, in Q2FY12. BSL is left
with just one quarter’s order book, which is a cause for grave concern.
Even though we have factored that the company would get an order to
the tune of | 1200 crore by the end of Q3FY12, high interest burden and
lower subsidy income booking in FY13 would lead to a substantial decline
in the net profit.
ƒ Higher subsidy accounting enables BSL to report profit
During Q2FY12, BSL accounted subsidy to the tune of | 107 crore, which
enabled it to report a net profit of | 23 crore. Excluding the subsidy the
company reported a loss of | 52 crore.
ƒ Earnings revision
We have revised downwards BSL’s earning estimates to factor in the
impact of lower subsidy income in FY13 and lower share of profits from
Great Offshore (GOL) as we have downgraded GOL’s FY13 earning
estimates by 43%. We have assumed that BSL would secure an order to
the tune of | 1200 crore by the end of Q3FY12. If the order does not
fructify in Q3FY12, we would revisit our numbers. We are concerned by
the inability of BSL to secure orders and are closely monitoring the
progress in this respect.
V a l u a t i o n
At the CMP of | 83, the stock is trading at 0.21x FY13E book value of |
392. We have valued the company on an SOTP basis with a price target of
| 75 and recommend a HOLD rating. Existing investors can exit the stock
at any up move in the price.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
N o o r d e r v i s i b i l i t y … .
Bharati Shipyard (BSL) reported a QoQ topline growth of 5.8% to | 465.2
crore in Q2FY12 mainly on account of higher subsidy income booked
during the quarter. The company booked subsidy to the tune of | 107
crore as against | 74 crore in Q1FY12. The EBITDA margin excluding
subsidy improved 40 bps to 18.7%. BSL has been able to report a profit
of | 23.5 crore mainly on account of subsidy income. The company’s total
order book and order book pending execution has declined by 8% and
55% to | 3913 crore and | 287 crore, respectively, in Q2FY12. BSL is left
with just one quarter’s order book, which is a cause for grave concern.
Even though we have factored that the company would get an order to
the tune of | 1200 crore by the end of Q3FY12, high interest burden and
lower subsidy income booking in FY13 would lead to a substantial decline
in the net profit.
ƒ Higher subsidy accounting enables BSL to report profit
During Q2FY12, BSL accounted subsidy to the tune of | 107 crore, which
enabled it to report a net profit of | 23 crore. Excluding the subsidy the
company reported a loss of | 52 crore.
ƒ Earnings revision
We have revised downwards BSL’s earning estimates to factor in the
impact of lower subsidy income in FY13 and lower share of profits from
Great Offshore (GOL) as we have downgraded GOL’s FY13 earning
estimates by 43%. We have assumed that BSL would secure an order to
the tune of | 1200 crore by the end of Q3FY12. If the order does not
fructify in Q3FY12, we would revisit our numbers. We are concerned by
the inability of BSL to secure orders and are closely monitoring the
progress in this respect.
V a l u a t i o n
At the CMP of | 83, the stock is trading at 0.21x FY13E book value of |
392. We have valued the company on an SOTP basis with a price target of
| 75 and recommend a HOLD rating. Existing investors can exit the stock
at any up move in the price.
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