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Revenue guidance pruned down…
On a consolidated basis, Bartronics reported its Q2FY11 results. On the
topline front, the results were in line with our estimates while it was
below our estimates on bottomline. The topline stood at | 224.1 crore
against our expectations of | 224.0 crore. Revenues improved 37.7%
QoQ and 28.2% YoY. The EBITDA was at | 48.6 crore, improving 13.6%
QoQ and declined 10.2% YoY. The EBITDA margin at 21.7% declined
461 bps QoQ and 930 bps YoY. A QoQ increase of 213% and 42.7% in
other cost and COGS, respectively, led to a decline in the EBITDA
margin. The company reported a PAT margin of 7.4% that declined as
compared to 13.8% in Q1FY11 primarily due to lower other income and
forex losses accounted during the quarter. PAT for the quarter stood at
| 16.5 crore as compared to | 22.5 crore in Q1FY11.
Highlights for the quarter
International revenues for the quarter stood at | 136 crore as
compared to | 98 crore in the last quarter. Domestic revenues stood
at | 88.1 crore. The company has been facing pressure on the order
book from its US subsidiary and revenues from the same are
expected to decline in the near future. However, the domestic and
South Asia operations are on track and major revenue growth would
be from these markets, going forward.
Aapke Dwar project has started generating advertisement revenues
from some kiosks starting from October 1, 2010. At present, 160
kiosks are operational and it is expected to increase to 1,200 by
January, 2011 and 2000 by March, 2011.
Valuation
At the CMP of | 103, Bartronics is trading at 2.8x its FY11 diluted EPS of |
36.2 and 1.7x its FY12E EPS of | 58.8. We continue to advise our clients to
avoid this stock until there is clarity on the share pledging by the
promoters of the company.
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