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http://content.icicidirect.com/mailimages/ICICIdirect_KalpataruPower_Q4FY12.pdf
S t r o n g e x e c u t i o n b u t w e a k m a r g i n s …
Kalpataru Power and Transmission (KPTL) reported its Q4FY12 results
that were largely in line with our estimates. Execution remained robust
with the topline coming in at | 1061 crore (I-direct estimate: | 1052 crore),
up 20% YoY. EBITDA margins remained subdued at 8.8% owing to
higher raw material cost and forex impact. Consequent to a lower
operating margin, the bottomline came in at | 56.7 crore (I-direct
estimate: | 63.4 crore), down 5% YoY. A lower debt burden (down 35%
QoQ) eased the finance costs by 31% on a sequential basis.
Reasonable order book amid change in margin profile…
With order inflows of | 2000 crore in the quarter, total standalone order
book is at | 6,100 crore (up 11% YoY). This implies a book to bill of 2.0x,
providing ample revenue visibility for the coming two years. On a
consolidated basis, total order book stands at | 11,600 crore. Of the
standalone order book, more than 90% is transmission orders (domestic
40% & international 50%) while remaining 10% consists of infrastructure
& distribution orders. The key surprise was the adverse impact on
margins due to a changing order backlog mix and inability to pass on
higher raw material costs. We believe, going ahead, margins would hover
between 10% and 10.5% in FY13E as execution will be more skewed
towards international orders. JMC Projects (KPTL’s 69% subsidiary)
reported healthy revenues at | 703 crore, up 44% YoY. EBITDA & PAT
margins were at 7.4% and 3.3%, respectively. Total order book for JMC
stands at | 5,500 crore, implying a book to bill of 2.6x on a TTM basis.
V a l u a t i o n
At the CMP of | 82, the stock is trading at 7.1x and 5.7x its FY13E and
FY14E EPS, respectively. Even though there will be a structural shift in the
margin profile of the standalone business, ~20% decline in the stock
price over past month has discounted this negative. A pick-up in
execution and orders will drive the re-rating. We have valued KPTL at
| 103 (8xFY13E EPS for base business + ~70% stake in JMC projects)
and have assigned a BUY rating to the stock
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_KalpataruPower_Q4FY12.pdf
S t r o n g e x e c u t i o n b u t w e a k m a r g i n s …
Kalpataru Power and Transmission (KPTL) reported its Q4FY12 results
that were largely in line with our estimates. Execution remained robust
with the topline coming in at | 1061 crore (I-direct estimate: | 1052 crore),
up 20% YoY. EBITDA margins remained subdued at 8.8% owing to
higher raw material cost and forex impact. Consequent to a lower
operating margin, the bottomline came in at | 56.7 crore (I-direct
estimate: | 63.4 crore), down 5% YoY. A lower debt burden (down 35%
QoQ) eased the finance costs by 31% on a sequential basis.
Reasonable order book amid change in margin profile…
With order inflows of | 2000 crore in the quarter, total standalone order
book is at | 6,100 crore (up 11% YoY). This implies a book to bill of 2.0x,
providing ample revenue visibility for the coming two years. On a
consolidated basis, total order book stands at | 11,600 crore. Of the
standalone order book, more than 90% is transmission orders (domestic
40% & international 50%) while remaining 10% consists of infrastructure
& distribution orders. The key surprise was the adverse impact on
margins due to a changing order backlog mix and inability to pass on
higher raw material costs. We believe, going ahead, margins would hover
between 10% and 10.5% in FY13E as execution will be more skewed
towards international orders. JMC Projects (KPTL’s 69% subsidiary)
reported healthy revenues at | 703 crore, up 44% YoY. EBITDA & PAT
margins were at 7.4% and 3.3%, respectively. Total order book for JMC
stands at | 5,500 crore, implying a book to bill of 2.6x on a TTM basis.
V a l u a t i o n
At the CMP of | 82, the stock is trading at 7.1x and 5.7x its FY13E and
FY14E EPS, respectively. Even though there will be a structural shift in the
margin profile of the standalone business, ~20% decline in the stock
price over past month has discounted this negative. A pick-up in
execution and orders will drive the re-rating. We have valued KPTL at
| 103 (8xFY13E EPS for base business + ~70% stake in JMC projects)
and have assigned a BUY rating to the stock
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