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http://content.icicidirect.com/mailimages/ICICIdirect%20BharatiShipyard_Q3FY12.pdf
P e r f o r m a n c e w o r s e n s ; f i n a n c i a l s t o r e m a i n
u n d e r s t r e s s … .
Bharati Shipyard (BSL) reported a dismal performance on the topline and
profitability front for Q3FY12. Topline including subsidy declined by 30%
QoQ to | 325 crore while the EBITDA (including subsidy) declined by 39%
to | 106 crore. The company booked subsidy to the tune of | 66 crore as
against | 107 crore in Q2FY12. The EBITDA margin, excluding subsidy,
declined 310 bps signifying weakness in operating performance. In spite
of booking subsidy of | 66 crore in Q3FY12, BSL has just about managed
to remain profitable at the net profit level. For 9MFY12, BSL reported
revenues (including subsidy) of | 1230 crore and a net profit of | 42 crore.
The company has accounted for subsidy of | 248 crore during 9MFY12,
which has enabled it to remain in the positive zone at the net profit level.
ƒ High debt, interest cost to pressurise financials
BSL has a debt in excess of | 3500 crore and FY11 debt equity stands at
3.7, which is substantially high. Considering its lower EBITDA generation
during 9MFY12 with interest cost as percentage to EBITDA being at
78.6%, servicing the debt obligations has become difficult.
ƒ Rating downgrade by CARE
CARE rating agency has downgraded BSL’s rating from BBB+ to BB-,
denoting stressed financials.
V a l u a t i o n
At the CMP of | 96, the stock is trading at 0.26x FY13E book value of
| 374. Considering the high debt levels and deteriorating profitability, we
expect the financial performance to remain under stress, going ahead. We
are discontinuing coverage on the stock. Existing investors can exit the
stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect%20BharatiShipyard_Q3FY12.pdf
P e r f o r m a n c e w o r s e n s ; f i n a n c i a l s t o r e m a i n
u n d e r s t r e s s … .
Bharati Shipyard (BSL) reported a dismal performance on the topline and
profitability front for Q3FY12. Topline including subsidy declined by 30%
QoQ to | 325 crore while the EBITDA (including subsidy) declined by 39%
to | 106 crore. The company booked subsidy to the tune of | 66 crore as
against | 107 crore in Q2FY12. The EBITDA margin, excluding subsidy,
declined 310 bps signifying weakness in operating performance. In spite
of booking subsidy of | 66 crore in Q3FY12, BSL has just about managed
to remain profitable at the net profit level. For 9MFY12, BSL reported
revenues (including subsidy) of | 1230 crore and a net profit of | 42 crore.
The company has accounted for subsidy of | 248 crore during 9MFY12,
which has enabled it to remain in the positive zone at the net profit level.
ƒ High debt, interest cost to pressurise financials
BSL has a debt in excess of | 3500 crore and FY11 debt equity stands at
3.7, which is substantially high. Considering its lower EBITDA generation
during 9MFY12 with interest cost as percentage to EBITDA being at
78.6%, servicing the debt obligations has become difficult.
ƒ Rating downgrade by CARE
CARE rating agency has downgraded BSL’s rating from BBB+ to BB-,
denoting stressed financials.
V a l u a t i o n
At the CMP of | 96, the stock is trading at 0.26x FY13E book value of
| 374. Considering the high debt levels and deteriorating profitability, we
expect the financial performance to remain under stress, going ahead. We
are discontinuing coverage on the stock. Existing investors can exit the
stock.
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