! Broadly in‐line, higher taxes dampen PAT: Aban’s revenues stood at Rs9bn, 5%
YoY growth and 29% sequential growth. Margins were steady at 53.6% as
against 57.8% in Q3FY12 and 51.3% in Q2FY13. On account of a higher effective
tax rate of 61%, PAT disappointed at Rs318m, a decline of 60.3% YoY and 41.0%
QoQ. Tax provisioning was high on account of certain contracts coming to an
end which requires adjustments based on actual.
! Fleet status: Of the five rigs that were due to be off-contract in October 2012,
three have been extended with the same customers. However, the pricing is yet
to be determined (DD2,4 & 5).
DD3 has been contracted for a three-year term, with Petrobras at a day rate of
US$1,39,000, 15% lower than the earlier day-rate. DD1 is currently working on a
short-term contract till March 2013. Besides, the company is also negotiating
another long-term contract for the same. However, the vessel did not work
during Q3FY13. Aban Ice’s contract with ONGC has been extended up to March
2013. The only vessel which remains uncontracted at this point is Tahara.
! Valuations: The stock trades at a PER of 7.9x FY14E and 4.4x FY15E. We have
valued the stock at Rs5x FY15E to arrive at our target price which gives us a
value of Rs398. On the basis of EV/EBITDA, the stock trades at 7.2x FY14E and
6.2x FY15E. We maintain ‘Accumulate’ on the stock.
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