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Sanghvi Movers:: Results below expectation…
Sanghvi Movers (SML) reported its Q3FY11 performance below our
expectations, primarily on account of lower than expected revenues and
a YoY decline in EBITDA margins. Revenues were lower than our
estimates on account of more than normal time taken for mobilising
cranes, stoppage of work at some sites on account of a delay in receipt
of receivables and occurrence of major breakdowns for some of the
cranes. This impacted revenues to the tune of | 9-10 crore for the
quarter. SML’s total operating income stood at | 80.8 crore reflecting a
fall of 2.4% YoY and 9.9% QoQ. The EBITDA margin declined 350 bps
YoY but improved 118 bps QoQ to 72.1%. The company reported a
23.3% YoY and 34.5% QoQ decrease in net profit to | 16.1 crore.
Highlights of the quarter
In terms of sector wise break-up of revenues for 9MFY11, power
contributed 28%, wind power contributed 26%, cement contributed
14%, refinery and gas contributed 15% while steel and metal
contributed 12%
Yield during Q3FY11 was 2.92% while utilisation was ~80%
Valuation
We expect SML to report a steady performance in the next few quarters.
The capacity utilisation is expected to remain firm around current levels
(~80% in Q3FY11) on account of the healthy demand scenario in the
power sector. At the current price of | 142, the stock is trading at 6.9x its
FY12E EPS of | 20.7. We recommend an ADD rating on the stock with a
target price of | 155, 7.5x FY12E EPS.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sanghvi Movers:: Results below expectation…
Sanghvi Movers (SML) reported its Q3FY11 performance below our
expectations, primarily on account of lower than expected revenues and
a YoY decline in EBITDA margins. Revenues were lower than our
estimates on account of more than normal time taken for mobilising
cranes, stoppage of work at some sites on account of a delay in receipt
of receivables and occurrence of major breakdowns for some of the
cranes. This impacted revenues to the tune of | 9-10 crore for the
quarter. SML’s total operating income stood at | 80.8 crore reflecting a
fall of 2.4% YoY and 9.9% QoQ. The EBITDA margin declined 350 bps
YoY but improved 118 bps QoQ to 72.1%. The company reported a
23.3% YoY and 34.5% QoQ decrease in net profit to | 16.1 crore.
Highlights of the quarter
In terms of sector wise break-up of revenues for 9MFY11, power
contributed 28%, wind power contributed 26%, cement contributed
14%, refinery and gas contributed 15% while steel and metal
contributed 12%
Yield during Q3FY11 was 2.92% while utilisation was ~80%
Valuation
We expect SML to report a steady performance in the next few quarters.
The capacity utilisation is expected to remain firm around current levels
(~80% in Q3FY11) on account of the healthy demand scenario in the
power sector. At the current price of | 142, the stock is trading at 6.9x its
FY12E EPS of | 20.7. We recommend an ADD rating on the stock with a
target price of | 155, 7.5x FY12E EPS.
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