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E n h a n c i n g p r e s e n c e i n o f f s h o r e s e g m e n t …
Great Eastern Shipping (GE Shipping) reported revenue performance in
line with our estimates. Consolidated revenues for Q1FY12 were
marginally higher at | 681.8 crore compared to our estimate of | 666.8
crore, however EBITDA margin was lower at 39.9% as against our
estimate of 43.0%. On a QoQ basis EBITDA margin has improved by 137
bps on the back of repairs and maintenance expense to revenues ratio
declining from 10.7% in Q4FY11 to 8.4% in Q1FY12. EBITDA increased
moderately by 17% QoQ to | 272.2 crore. However, PAT was
significantly higher than our estimate of | 112 crore at | 162.6 crore. The
significant deviance from our PAT estimates is owing to the company
booking an extraordinary profit on sale of ships (| 46.1 crore) and Gain on
Forex transaction (| 9.0 crore). GE Shipping is enhancing its presence in
the high margin offshore segment and has a committed capex of ~ |
2000 crore. It has an order book of 7 assets to be added to its offshore
fleet over the next two years. Enhanced presence in the lucrative and less
volatile offshore segment would enable GE Shipping to report improved
revenues and profitability in FY12 and FY13 on the back of better revenue
visibility and higher margins.
ƒ Extraordinary gain boosts bottom-line
GE Shipping reported a 13% QoQ increase in revenue in Q1FY12 at |
681.8 crore as against | 601.6 crore in Q4FY11. The increase in topline
was mainly due to the increase in number of operating days from 2850 in
Q4FY11 to 3178 in Q1FY12 due to induction of new assets and lower dry
docking. The company reported an EBITDA of | 272.2 crore in Q1FY12 as
against | 231.9 crore in Q4FY11. In Q1FY12 GE Shipping booked an profit
on sale of ship to the tune of |46.1 crore and forex gain of | 9.0 crore,
which enabled it to report a net profit of | 162.6 crore in Q1FY12.
V a l u a t i o n
At the CMP of | 242, the stock is trading at 4.8x FY13E EPS of | 50.9 and
0.51x FY13E book value of | 476. We have valued GE Shipping on P/BV
and assigned a multiple of 0.6x with a price target of | 288. We
recommend a BUY rating on the stock. Existing investors should continue
to HOLD the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
E n h a n c i n g p r e s e n c e i n o f f s h o r e s e g m e n t …
Great Eastern Shipping (GE Shipping) reported revenue performance in
line with our estimates. Consolidated revenues for Q1FY12 were
marginally higher at | 681.8 crore compared to our estimate of | 666.8
crore, however EBITDA margin was lower at 39.9% as against our
estimate of 43.0%. On a QoQ basis EBITDA margin has improved by 137
bps on the back of repairs and maintenance expense to revenues ratio
declining from 10.7% in Q4FY11 to 8.4% in Q1FY12. EBITDA increased
moderately by 17% QoQ to | 272.2 crore. However, PAT was
significantly higher than our estimate of | 112 crore at | 162.6 crore. The
significant deviance from our PAT estimates is owing to the company
booking an extraordinary profit on sale of ships (| 46.1 crore) and Gain on
Forex transaction (| 9.0 crore). GE Shipping is enhancing its presence in
the high margin offshore segment and has a committed capex of ~ |
2000 crore. It has an order book of 7 assets to be added to its offshore
fleet over the next two years. Enhanced presence in the lucrative and less
volatile offshore segment would enable GE Shipping to report improved
revenues and profitability in FY12 and FY13 on the back of better revenue
visibility and higher margins.
ƒ Extraordinary gain boosts bottom-line
GE Shipping reported a 13% QoQ increase in revenue in Q1FY12 at |
681.8 crore as against | 601.6 crore in Q4FY11. The increase in topline
was mainly due to the increase in number of operating days from 2850 in
Q4FY11 to 3178 in Q1FY12 due to induction of new assets and lower dry
docking. The company reported an EBITDA of | 272.2 crore in Q1FY12 as
against | 231.9 crore in Q4FY11. In Q1FY12 GE Shipping booked an profit
on sale of ship to the tune of |46.1 crore and forex gain of | 9.0 crore,
which enabled it to report a net profit of | 162.6 crore in Q1FY12.
V a l u a t i o n
At the CMP of | 242, the stock is trading at 4.8x FY13E EPS of | 50.9 and
0.51x FY13E book value of | 476. We have valued GE Shipping on P/BV
and assigned a multiple of 0.6x with a price target of | 288. We
recommend a BUY rating on the stock. Existing investors should continue
to HOLD the stock.
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