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SECTOR OUTLOOK: CONSTRUCTION
Sector outlook post Q3FY12 numbers - Fund raising at SPV
level, decline in interest rates and improvement in order
inflows hold the key
Q3FY12 results - a mixed bag
Q3FY12 numbers were mixed bag with some of the companies disappointed on execution, margins and net profit front. Execution was likely to ramp up from Q3FY12/
Q4FY12 onwards, however it continued to remain below expectations due to adverse macro-economic scenario of high interest rates, delays in project approvals,
land acquisition and environmental clearance related issues. Companies like IVRCL,
NCC, BGR Energy and J Kumar Infra were impacted by these issues. However, IRB
Infra, JP Associates, Unity infra and Pratibha industries outperformed our expectations.
Profitability was impacted by poor execution and continued high borrowings and
working capital requirements. Fund raising at the SPV level has also not happened
till Q3FY12 - this may impact financial closure of projects and then correspondingly
FY13 growth.
Following parameters impacted Q3FY12 results:
n Order books healthy but execution remained slow. Current order books remained healthy but execution growth was impacted due to very high interest
rates or lack of funding to achieve financial closure or environmental clearance
related issues. Companies like IRB Infra, JP Associates, Unity Infra and Pratibha
industries reported excellent growth which was better than our estimates led by
execution ramp up but for other companies, we believe that apart from above
mentioned reasons, execution growth remained slow in order to contain working
capital cycle and maintain balance sheet strength
http://www.kotaksecurities.com/pdf/dmb/MorningInsight24022012.pdf
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
SECTOR OUTLOOK: CONSTRUCTION
Sector outlook post Q3FY12 numbers - Fund raising at SPV
level, decline in interest rates and improvement in order
inflows hold the key
Q3FY12 results - a mixed bag
Q3FY12 numbers were mixed bag with some of the companies disappointed on execution, margins and net profit front. Execution was likely to ramp up from Q3FY12/
Q4FY12 onwards, however it continued to remain below expectations due to adverse macro-economic scenario of high interest rates, delays in project approvals,
land acquisition and environmental clearance related issues. Companies like IVRCL,
NCC, BGR Energy and J Kumar Infra were impacted by these issues. However, IRB
Infra, JP Associates, Unity infra and Pratibha industries outperformed our expectations.
Profitability was impacted by poor execution and continued high borrowings and
working capital requirements. Fund raising at the SPV level has also not happened
till Q3FY12 - this may impact financial closure of projects and then correspondingly
FY13 growth.
Following parameters impacted Q3FY12 results:
n Order books healthy but execution remained slow. Current order books remained healthy but execution growth was impacted due to very high interest
rates or lack of funding to achieve financial closure or environmental clearance
related issues. Companies like IRB Infra, JP Associates, Unity Infra and Pratibha
industries reported excellent growth which was better than our estimates led by
execution ramp up but for other companies, we believe that apart from above
mentioned reasons, execution growth remained slow in order to contain working
capital cycle and maintain balance sheet strength
http://www.kotaksecurities.com/pdf/dmb/MorningInsight24022012.pdf
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