TRF Stumped, Downgrade to Hold ::Emkay

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TRF

Stumped, Downgrade to Hold

HOLD

CMP: Rs 460                                       Target Price: Rs 428

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n     TRF disappoints – Standalone net loss at Rs15 mn attributed to inefficient project execution, which negated robust revenue growth of 69% yoy to Rs3.2 bn

n     Auto components business performance improves – posts net profit of Rs21 nm after 4 quarters of losses. This is attributed to (1) 55% yoy revenue growth and (2) High other income

n     TRF shares mixed outlook for FY12E (1) Strong pick-up in order finalization in power sector (2) Pressure on operating margins (3) Auto to drive growth – Sales Rs6 bn at 6% margin

n     Downgrade FY12E consolidated earnings by 35% yoy to Rs37.6. Downgrade rating to HOLD with revised price target of Rs428 per share (@10X FY13E)