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TVS Motor
For 1QFY2012, TVS Motor (TSM) reported a strong 25.3% yoy (6.9% qoq) increase in its
top line to `1,746cr, slightly higher than our expectation due to better-than-expected
average net realisation. Top-line growth was led by a 15.6% yoy jump (flat qoq) in
volumes and a 7.8% yoy (5.9% qoq) increase in average net realisation to `31,884.
Average net realisation improved on account of a superior product mix (higher share of
exports) and price increases. On the operating front, EBITDA margin improved by 26bp
yoy (112bp qoq) to 6.7%, despite a 186bp yoy (207bp qoq) increase in raw-material
costs. Margin expansion was supported by a sharp 212bp yoy (303bp qoq) decline in
other expenditure. As a result, net profit jumped substantially by 45.7% yoy (41.1% qoq) to
`59cr against our expectation of `46cr. Further, the decrease in interest cost on account of
a decline in debt levels supported strong bottom-line growth.
At `49, the stock is trading at attractive valuations of 10.6x FY2012E and 9.4x FY2013E
earnings. We maintain our Buy view on the stock and value the company at 12x (20%
discount to the average multiple of the top two industry players at 15x) FY2013E earnings
to arrive at a target price of `62.
Sadbhav Engineering
For 1QFY2012, Sadbhav Engineering’s (SEL) numbers broadly came in-line with our
expectations. The company reported healthy 44.1% yoy top-line growth to `612.9cr
(`425.3cr) vs. our estimate of 54.0% growth. Ramp-up in the execution of captive road
BOT projects has led to this robust revenue growth. On the operating margin front, the
company posted OPM of 11.1% (11.9%), above our estimates of 9.7%. Interest and
depreciation costs came in-line with our estimates. On the earnings front, SEL reported
robust 32.4% growth yoy to `33.8cr (`25.5cr), higher than our expectations of `30.3cr.
We recommend our Accumulate view on the stock with the target price of `161.
Sarda Energy
Sarda Energy reported its 1QFY2012 results. Net sales grew by 17.2% yoy to `254cr,
driven by higher revenue of the steel segment. The steel segment’s revenue grew by 71.1%
yoy to `162cr, while the ferro alloys segment’s revenue declined by 29.9% yoy to `79cr.
The company’s EBITDA decreased by 19.8% yoy to `41cr due to subdued profitability
performance from the ferro alloy segment. The ferro alloy segment’s EBIT decreased by
73.1% yoy to `7cr, which was partially offset by the increase in the steel segment’s EBIT,
which grew by 35.1% yoy to `22cr. The company’s PAT decreased by 20.2% yoy
to `11cr. We maintain our Buy view on the stock, while we keep our target price under
review.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
TVS Motor
For 1QFY2012, TVS Motor (TSM) reported a strong 25.3% yoy (6.9% qoq) increase in its
top line to `1,746cr, slightly higher than our expectation due to better-than-expected
average net realisation. Top-line growth was led by a 15.6% yoy jump (flat qoq) in
volumes and a 7.8% yoy (5.9% qoq) increase in average net realisation to `31,884.
Average net realisation improved on account of a superior product mix (higher share of
exports) and price increases. On the operating front, EBITDA margin improved by 26bp
yoy (112bp qoq) to 6.7%, despite a 186bp yoy (207bp qoq) increase in raw-material
costs. Margin expansion was supported by a sharp 212bp yoy (303bp qoq) decline in
other expenditure. As a result, net profit jumped substantially by 45.7% yoy (41.1% qoq) to
`59cr against our expectation of `46cr. Further, the decrease in interest cost on account of
a decline in debt levels supported strong bottom-line growth.
At `49, the stock is trading at attractive valuations of 10.6x FY2012E and 9.4x FY2013E
earnings. We maintain our Buy view on the stock and value the company at 12x (20%
discount to the average multiple of the top two industry players at 15x) FY2013E earnings
to arrive at a target price of `62.
Sadbhav Engineering
For 1QFY2012, Sadbhav Engineering’s (SEL) numbers broadly came in-line with our
expectations. The company reported healthy 44.1% yoy top-line growth to `612.9cr
(`425.3cr) vs. our estimate of 54.0% growth. Ramp-up in the execution of captive road
BOT projects has led to this robust revenue growth. On the operating margin front, the
company posted OPM of 11.1% (11.9%), above our estimates of 9.7%. Interest and
depreciation costs came in-line with our estimates. On the earnings front, SEL reported
robust 32.4% growth yoy to `33.8cr (`25.5cr), higher than our expectations of `30.3cr.
We recommend our Accumulate view on the stock with the target price of `161.
Sarda Energy
Sarda Energy reported its 1QFY2012 results. Net sales grew by 17.2% yoy to `254cr,
driven by higher revenue of the steel segment. The steel segment’s revenue grew by 71.1%
yoy to `162cr, while the ferro alloys segment’s revenue declined by 29.9% yoy to `79cr.
The company’s EBITDA decreased by 19.8% yoy to `41cr due to subdued profitability
performance from the ferro alloy segment. The ferro alloy segment’s EBIT decreased by
73.1% yoy to `7cr, which was partially offset by the increase in the steel segment’s EBIT,
which grew by 35.1% yoy to `22cr. The company’s PAT decreased by 20.2% yoy
to `11cr. We maintain our Buy view on the stock, while we keep our target price under
review.
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