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Jyoti Structures
H i g h i n t e r e s t c o s t s t o ma r e x e c u t i o n g r owt h…
Jyoti Structures (JSL) reported in line Q1FY12 results. Revenues grew
13% YoY at | 637 crore (I-direct estimate: | 656 crore). EBITDA grew 10%
to | 70 crore vs. our expectation of | 74 crore. Hence, EBITDA margins at
11% were a tad below our expectation of 11.2%. This was on the back of
high inputs costs. However, higher interest cost during Q1FY12 resulted
in a flattish bottomline of | 26 crore (I-direct estimate: | 25.8 crore). Going
ahead, we believe execution growth will be nullified by higher borrowing
costs and working capital requirement.
ƒ Q1FY12 order inflows reasonable coupled with healthy pipeline
JSL received orders worth | 621 crore in Q1FY12, up 16% YoY. The
backlog for the quarter stood at | 4470 crore, implying a reasonable
revenue visibility with a book to bill ratio of 1.8x. From a client exposure
perspective, PGCIL and utilities comprise 23% and 63% share of the
backlog. There was a significant shift in the geographical composition as
the international backlog comprises 30% of the backlog as of Q1FY12.
JSL foresees a robust pipeline for transmission and substation order (~ |
14000 crore). As of Q1FY12, transmission, substation and rural
electrification comprise 62%, 19% and 19%, respectively. The company
also expects to bid for BOT transmission projects in FY12.
ƒ EBITDA margins to remain stable but high interest costs a headwind
EBITDA margins were in line with our estimates for Q1FY12. For FY12-
FY13E, we estimate margins will be at 11.4% as 90% of the backlog is
based on PVC contracts. However, rising interest rates will not go down
well for JSL as rising interest rates will weaken PAT growth and high
execution will call for higher working capital requirement. In lieu of the
same, we have increased our interest expenses and reduced our PAT
estimates for FY12E and FY13E by 13% and 4%, respectively.
V a l u a t i o n
We expect JSL to report better execution of backlog on reasonable order
flows in the last couple of quarters. However, at the same time, high
interest costs will dent the profitability of JSL to the tune of 13% and 4%
in FY12E and FY13E, respectively. We expect the stock to languish owing
to macro headwinds and maintain our earlier rating and target price
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jyoti Structures
H i g h i n t e r e s t c o s t s t o ma r e x e c u t i o n g r owt h…
Jyoti Structures (JSL) reported in line Q1FY12 results. Revenues grew
13% YoY at | 637 crore (I-direct estimate: | 656 crore). EBITDA grew 10%
to | 70 crore vs. our expectation of | 74 crore. Hence, EBITDA margins at
11% were a tad below our expectation of 11.2%. This was on the back of
high inputs costs. However, higher interest cost during Q1FY12 resulted
in a flattish bottomline of | 26 crore (I-direct estimate: | 25.8 crore). Going
ahead, we believe execution growth will be nullified by higher borrowing
costs and working capital requirement.
ƒ Q1FY12 order inflows reasonable coupled with healthy pipeline
JSL received orders worth | 621 crore in Q1FY12, up 16% YoY. The
backlog for the quarter stood at | 4470 crore, implying a reasonable
revenue visibility with a book to bill ratio of 1.8x. From a client exposure
perspective, PGCIL and utilities comprise 23% and 63% share of the
backlog. There was a significant shift in the geographical composition as
the international backlog comprises 30% of the backlog as of Q1FY12.
JSL foresees a robust pipeline for transmission and substation order (~ |
14000 crore). As of Q1FY12, transmission, substation and rural
electrification comprise 62%, 19% and 19%, respectively. The company
also expects to bid for BOT transmission projects in FY12.
ƒ EBITDA margins to remain stable but high interest costs a headwind
EBITDA margins were in line with our estimates for Q1FY12. For FY12-
FY13E, we estimate margins will be at 11.4% as 90% of the backlog is
based on PVC contracts. However, rising interest rates will not go down
well for JSL as rising interest rates will weaken PAT growth and high
execution will call for higher working capital requirement. In lieu of the
same, we have increased our interest expenses and reduced our PAT
estimates for FY12E and FY13E by 13% and 4%, respectively.
V a l u a t i o n
We expect JSL to report better execution of backlog on reasonable order
flows in the last couple of quarters. However, at the same time, high
interest costs will dent the profitability of JSL to the tune of 13% and 4%
in FY12E and FY13E, respectively. We expect the stock to languish owing
to macro headwinds and maintain our earlier rating and target price
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