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Revenue growth muted: Hindustan Construction Company (HCC) posted a
muted sales (net) growth of 11.1% at Rs10bn in Q3FY11 which was below our
expectation. This is attributed to slow moving hydro power projects in addition
to non‐contribution from AP related projects. EBITDA margins declined YoY by
42.4bps at 12.6% and by 65bps QoQ. The company has booked revenue claims
for a project to the tune of Rs650m.
Adjusted PAT drops 16% YoY: HCC in Q3FY11 has reported a loss of Rs61m on
account of an exchange loss. Other extra‐ordinary items include profit on claims
received to the tune of Rs60m and taxation of Rs28m of the previous quarters.
Thus, adjusting to the above one‐off’s, adjusted PAT stood at Rs108m (16%
down YoY).
Updates: The current order book stands at Rs185bn (down from Rs197bn in
Q2FY11) and the order inflow for Q3FY11 stands at Rs1bn. For 9MFY11, it stands
at Rs27bn. Lavasa Corporation’s legal battle with MOEF is still going on and thus,
the IPO has been temporarily deferred. Equity invested in BOTs stand at Rs5.4bn
till now.
Valuations: We have downgraded our FY11E and FY12E estimates factoring
lower execution and higher interest cost. The company has increased its level of
borrowings on account of investments in working capital and subsidiaries.
Verdict on Lavasa would be the key event to track in the near future. As the
CMP has factored in fears pertaining to business slow down and thus earnings,
any positive news flows on Lavasa would be the key trigger, going forward and
thus, we maintain ‘Accumulate
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Revenue growth muted: Hindustan Construction Company (HCC) posted a
muted sales (net) growth of 11.1% at Rs10bn in Q3FY11 which was below our
expectation. This is attributed to slow moving hydro power projects in addition
to non‐contribution from AP related projects. EBITDA margins declined YoY by
42.4bps at 12.6% and by 65bps QoQ. The company has booked revenue claims
for a project to the tune of Rs650m.
Adjusted PAT drops 16% YoY: HCC in Q3FY11 has reported a loss of Rs61m on
account of an exchange loss. Other extra‐ordinary items include profit on claims
received to the tune of Rs60m and taxation of Rs28m of the previous quarters.
Thus, adjusting to the above one‐off’s, adjusted PAT stood at Rs108m (16%
down YoY).
Updates: The current order book stands at Rs185bn (down from Rs197bn in
Q2FY11) and the order inflow for Q3FY11 stands at Rs1bn. For 9MFY11, it stands
at Rs27bn. Lavasa Corporation’s legal battle with MOEF is still going on and thus,
the IPO has been temporarily deferred. Equity invested in BOTs stand at Rs5.4bn
till now.
Valuations: We have downgraded our FY11E and FY12E estimates factoring
lower execution and higher interest cost. The company has increased its level of
borrowings on account of investments in working capital and subsidiaries.
Verdict on Lavasa would be the key event to track in the near future. As the
CMP has factored in fears pertaining to business slow down and thus earnings,
any positive news flows on Lavasa would be the key trigger, going forward and
thus, we maintain ‘Accumulate
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