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Major order inflow…
Bajaj Electricals’ engineering & project (E&P) division has bagged eight
new orders of | 518 crore under the Rajiv Gandhi Grameen Vidyutikaran
Yojna (RGGVY) from Madhya Pradesh Purva Kshetra Vidyut Vitaran
Company for the Jabalpur and Bhopal districts. These orders will be
executed in the next 24 months. The current order book size stands at
| 3359 crore. The E&P segment witnessed 13% YoY revenue growth
during Q1FY15 as the company has largely focused on maintaining the
margin. The EBIT loss narrowed down substantially QoQ from | 26 crore
to ~| 6 crore in Q1FY15. The EBIT also includes incremental depreciation
charges of | 2 crore due to a change in the depreciation policy.
Our stance
With an expected turnaround in the E&P business from FY15E onwards
and continued dominance in the lighting & CD business, we expect BEL to
generate EBITDA of | 315 crore in FY15E and | 430 crore in FY16E. We
believe the stock is trading at attractive multiples considering the
turnaround in the E&P segment. We have valued the CD, lighting and E&P
business at 12x, 6x and 6x FY16E EBITDA, respectively, to arrive at a
target price of | 416/share with a BUY recommendation.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
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Major order inflow…
Bajaj Electricals’ engineering & project (E&P) division has bagged eight
new orders of | 518 crore under the Rajiv Gandhi Grameen Vidyutikaran
Yojna (RGGVY) from Madhya Pradesh Purva Kshetra Vidyut Vitaran
Company for the Jabalpur and Bhopal districts. These orders will be
executed in the next 24 months. The current order book size stands at
| 3359 crore. The E&P segment witnessed 13% YoY revenue growth
during Q1FY15 as the company has largely focused on maintaining the
margin. The EBIT loss narrowed down substantially QoQ from | 26 crore
to ~| 6 crore in Q1FY15. The EBIT also includes incremental depreciation
charges of | 2 crore due to a change in the depreciation policy.
Our stance
With an expected turnaround in the E&P business from FY15E onwards
and continued dominance in the lighting & CD business, we expect BEL to
generate EBITDA of | 315 crore in FY15E and | 430 crore in FY16E. We
believe the stock is trading at attractive multiples considering the
turnaround in the E&P segment. We have valued the CD, lighting and E&P
business at 12x, 6x and 6x FY16E EBITDA, respectively, to arrive at a
target price of | 416/share with a BUY recommendation.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://content.icicidirect.com/mailimages/IDirect_BajajElectricals_QC_Sept14.pdf
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