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Jun-q operating performance healthy. Punj Lloyd reported net sales of
Rs22.5bn, up 40% YoY. EBITDA margin of 8% (up 30bps YoY) was decent
amid high RM cost pressures (up 910bps), which were offset by lower staff,
subcontracting and other operating expenses as a % of sales.
High interest cost and taxes lead PAT level loss: Punj Lloyd reported loss of
Rs123mn in 1QFY12 vs. Rs306mn loss in Jun-q. The reported bottom-line is
below our and consensus estimate of a small profit (~Rs50-65mn). Jun-q
interest cost of Rs1.13bn was up 40% and tax rate was abnormally high (242%),
comprising mainly of current tax expense.
Topline growth driven by infrastructure and tankage segments:
Infrastructure (including power) segment revenue was up 89% to Rs9.14bn and
tankages up ~381% to Rs2.97bn. We deduce that there has been healthy
revenue booking in power BoP and Asia Pacific Infra order backlog. For the 5th
consecutive quarter process segment (including offshore) reported revenue degrowth
in YoY terms (~23.5% down in Jun-q). This appears to be closely
linked to revenue de-growth from Middle East where a large proportion of
process backlog is concentrated. (see segment-wise and geography wise
quarterly revenue and order backlog trends inside the report)
Has the company dropped an order from process backlog in Jun-q?
Reported Jun-q backlog of ~Rs50bn (including Rs13.1bn from offshore which
has been reported as a separate segment this time) is ~Rs20bn lower than
4QFY11 level. Reported inflows in process/offshore add up to ~Rs2.1bn.
Adjusting Mar-q process backlog for Jun-q revenue and inflows it appears that
PUNJ has dropped ~Rs17-18bn order from backlog. Jun-q inflows in Infra
segment of ~Rs36.5bn (as per our calculation), is among best performances by
PUNJ in last 8 quarters.
Maintain Neutral ahead of conference call scheduled for tomorrow (3PM
IST). We remain cautious of still pending outcome of arbitration proceedings on
~Rs4bn revenue booked on past orders and advances received from Libya
(~Rs5.1bn vs. Rs2.15bn expenses incurred). We seek clarifications on outlook
for process backlog execution, and interest/tax cost guidance for FY12. Weak
order inflow is key downside risk
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jun-q operating performance healthy. Punj Lloyd reported net sales of
Rs22.5bn, up 40% YoY. EBITDA margin of 8% (up 30bps YoY) was decent
amid high RM cost pressures (up 910bps), which were offset by lower staff,
subcontracting and other operating expenses as a % of sales.
High interest cost and taxes lead PAT level loss: Punj Lloyd reported loss of
Rs123mn in 1QFY12 vs. Rs306mn loss in Jun-q. The reported bottom-line is
below our and consensus estimate of a small profit (~Rs50-65mn). Jun-q
interest cost of Rs1.13bn was up 40% and tax rate was abnormally high (242%),
comprising mainly of current tax expense.
Topline growth driven by infrastructure and tankage segments:
Infrastructure (including power) segment revenue was up 89% to Rs9.14bn and
tankages up ~381% to Rs2.97bn. We deduce that there has been healthy
revenue booking in power BoP and Asia Pacific Infra order backlog. For the 5th
consecutive quarter process segment (including offshore) reported revenue degrowth
in YoY terms (~23.5% down in Jun-q). This appears to be closely
linked to revenue de-growth from Middle East where a large proportion of
process backlog is concentrated. (see segment-wise and geography wise
quarterly revenue and order backlog trends inside the report)
Has the company dropped an order from process backlog in Jun-q?
Reported Jun-q backlog of ~Rs50bn (including Rs13.1bn from offshore which
has been reported as a separate segment this time) is ~Rs20bn lower than
4QFY11 level. Reported inflows in process/offshore add up to ~Rs2.1bn.
Adjusting Mar-q process backlog for Jun-q revenue and inflows it appears that
PUNJ has dropped ~Rs17-18bn order from backlog. Jun-q inflows in Infra
segment of ~Rs36.5bn (as per our calculation), is among best performances by
PUNJ in last 8 quarters.
Maintain Neutral ahead of conference call scheduled for tomorrow (3PM
IST). We remain cautious of still pending outcome of arbitration proceedings on
~Rs4bn revenue booked on past orders and advances received from Libya
(~Rs5.1bn vs. Rs2.15bn expenses incurred). We seek clarifications on outlook
for process backlog execution, and interest/tax cost guidance for FY12. Weak
order inflow is key downside risk
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