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India Equity Research Reports, IPO and Stock News
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n Weak performance in Q4FY12; Revenue growth of 5.4% yoy
to Rs4.4 bn and APAT decline of 26% yoy to Rs344 mn;
n Engines report lowest revenue growth (5.4% yoy) in last 9
quarters and Infrastructure reports highest loss (Rs41 mn) in
last 11 quarters
n Deviation in engine strategy, looking beyond the last mile
transport connectivity market for growth in engines segment
n Near term earnings risk offset by FCF yield of 8% in FY14,
Retain Buy rating with price target of Rs90/Share
Weak performance in Q4FY12, Delivers 26% decline in APAT
Led by decline in 3-W volumes in Q4FY12 alongside continued weakness in the
infrastructure segment, Greaves Cotton delivers weak performance in Q4FY12.
Revenues decline 1.8% yoy to Rs4.4 bn, wherein engines segment grew by 5.4% yoy to
Rs3.9 bn and Infrastructure decline 41.2% yoy to Rs383 mn. The Ebidta margin decline
100 bps yoy to 13.4%, led by higher operating spends and higher loss in infrastructure
segment. Consequently, Ebidta decline 8.9% yoy to Rs596 mn, staying below
expectations. Led by high other income in Q4FY11 and depreciation on new capacity,
APAT declined by 26% yoy to Rs344 mn.
Engines report lowest revenue growth in last 9 quarters and Infrastructure
reports highest loss in last 11 quarters
Engines grew by 5.4% yoy to Rs3.9 bn, lowest growth in last 9 quarters. It is largely
attributed to weakness in the 3-W market. But, Ebit margins expanded by 20 bps yoy
and 190 bps qoq; benefiting from price increases. Infrastructure segment continues to
weaken with 41.2% yoy decline in revenue to Rs383 mn and Ebit loss even widening
further to Rs41 mn. This is highest loss reported in last 11 quarters.
3-W industry declines; partially offset by ramp-up in Tata Motors
Q4FY12 was weakest quarter for the 3-W industry, reporting 4-5% decline in industry
volumes in January-March 2012 period. This is the weakest performance in last 10
quarters. However, good ramp-up in Tata Motors volumes to 5500/Month has partially
offset the decline in 3-W volumes.
Other expenditure bar is raised; FY13E would also see elevated levels
Negative surprise in other expenditure was seen in Q4FY12 and FY12. It has increased
21.8% yoy to Rs471 mn and 13.7% yoy to Rs1.5 bn. This is led by corporate branding
activity and costs associated with new facility. Management have hinted at sustained
high level of other expenditure in ensuing quarters as well.
New capacity commences operations at Ranipet; Other expansion to
follow suit
The 1st phase of auto-engines plant at Ranipet has commenced operations. The
expansion of 2nd phase is under-way, slated to commence operations in June 2012.
Also, Greaves Cotton has expanded capacity in agri engines from 1000/Day to
1500/Day.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
n Weak performance in Q4FY12; Revenue growth of 5.4% yoy
to Rs4.4 bn and APAT decline of 26% yoy to Rs344 mn;
n Engines report lowest revenue growth (5.4% yoy) in last 9
quarters and Infrastructure reports highest loss (Rs41 mn) in
last 11 quarters
n Deviation in engine strategy, looking beyond the last mile
transport connectivity market for growth in engines segment
n Near term earnings risk offset by FCF yield of 8% in FY14,
Retain Buy rating with price target of Rs90/Share
Weak performance in Q4FY12, Delivers 26% decline in APAT
Led by decline in 3-W volumes in Q4FY12 alongside continued weakness in the
infrastructure segment, Greaves Cotton delivers weak performance in Q4FY12.
Revenues decline 1.8% yoy to Rs4.4 bn, wherein engines segment grew by 5.4% yoy to
Rs3.9 bn and Infrastructure decline 41.2% yoy to Rs383 mn. The Ebidta margin decline
100 bps yoy to 13.4%, led by higher operating spends and higher loss in infrastructure
segment. Consequently, Ebidta decline 8.9% yoy to Rs596 mn, staying below
expectations. Led by high other income in Q4FY11 and depreciation on new capacity,
APAT declined by 26% yoy to Rs344 mn.
Engines report lowest revenue growth in last 9 quarters and Infrastructure
reports highest loss in last 11 quarters
Engines grew by 5.4% yoy to Rs3.9 bn, lowest growth in last 9 quarters. It is largely
attributed to weakness in the 3-W market. But, Ebit margins expanded by 20 bps yoy
and 190 bps qoq; benefiting from price increases. Infrastructure segment continues to
weaken with 41.2% yoy decline in revenue to Rs383 mn and Ebit loss even widening
further to Rs41 mn. This is highest loss reported in last 11 quarters.
3-W industry declines; partially offset by ramp-up in Tata Motors
Q4FY12 was weakest quarter for the 3-W industry, reporting 4-5% decline in industry
volumes in January-March 2012 period. This is the weakest performance in last 10
quarters. However, good ramp-up in Tata Motors volumes to 5500/Month has partially
offset the decline in 3-W volumes.
Other expenditure bar is raised; FY13E would also see elevated levels
Negative surprise in other expenditure was seen in Q4FY12 and FY12. It has increased
21.8% yoy to Rs471 mn and 13.7% yoy to Rs1.5 bn. This is led by corporate branding
activity and costs associated with new facility. Management have hinted at sustained
high level of other expenditure in ensuing quarters as well.
New capacity commences operations at Ranipet; Other expansion to
follow suit
The 1st phase of auto-engines plant at Ranipet has commenced operations. The
expansion of 2nd phase is under-way, slated to commence operations in June 2012.
Also, Greaves Cotton has expanded capacity in agri engines from 1000/Day to
1500/Day.
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