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M a r g i n s c o n t r a c t … o r d e r s t o p r o v i d e t r i g g e r …
Shiv-Vani Oil’s Q2FY12 revenues were above our estimates but profits
were below our estimates. Revenues increased 12.1% YoY to | 322.1
crore but declined 21.2% on a QoQ basis. This sequential QoQ decline
was mainly due to the seasonal effect, where, on account of monsoon,
seismic activities and utilisations are lower. Net profits increased 2% YoY
to | 33.3 crore. However, lack of order intake over the past few quarters
has reduced the order book to | 2,300 crore executable over the next two
years. We have revised our FY12E and FY13E EPS estimates to | 42 and |
44.1, respectively. High debt levels, lack of order intake and promoter
pledging of shares has put pressure on the stock price over the past few
quarters. However, repayment of debt and flow of new order in H2FY12,
going forward, would provide upsides to the stock. We maintain our BUY
rating on the stock with a price target of | 265.
ƒ Highlights of the quarter
The typical seasonal effect in the second quarter of the fiscal year
led to a 21.2% QoQ decline in revenues from | 408.6 crore in
Q1FY12 to | 322.1 crore in Q2FY12. EBITDA margins declined 450
bps YoY to 41% in Q2FY12. The company expects the EBITDA
margin to stabilise at 47%, going forward (our estimates: 45.8% in
FY13E). Shiv-Vani reported a 2% YoY increase in net profit from |
32.6 crore in Q2FY11 to | 33.3 crore in Q2FY12. The net profit was
below our estimates due to the interest cost of | 83.8 crore, an
increase of 5.5% YoY and 20.9% QoQ.
V a l u a t i o n
Shiv Vani’s order book has declined to | 2,300 crore (executable over
next two years) due to lack of order intake over the past few quarters.
This has reduced Shiv-Vani’s revenues visibility, going forward. However,
winning new orders from ONGC may provide an upside to the stock. The
stock is currently trading at 4.7x FY13E EPS of | 44.2. We have valued the
stock at 6x FY13E EPS, with a price target | 265.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
M a r g i n s c o n t r a c t … o r d e r s t o p r o v i d e t r i g g e r …
Shiv-Vani Oil’s Q2FY12 revenues were above our estimates but profits
were below our estimates. Revenues increased 12.1% YoY to | 322.1
crore but declined 21.2% on a QoQ basis. This sequential QoQ decline
was mainly due to the seasonal effect, where, on account of monsoon,
seismic activities and utilisations are lower. Net profits increased 2% YoY
to | 33.3 crore. However, lack of order intake over the past few quarters
has reduced the order book to | 2,300 crore executable over the next two
years. We have revised our FY12E and FY13E EPS estimates to | 42 and |
44.1, respectively. High debt levels, lack of order intake and promoter
pledging of shares has put pressure on the stock price over the past few
quarters. However, repayment of debt and flow of new order in H2FY12,
going forward, would provide upsides to the stock. We maintain our BUY
rating on the stock with a price target of | 265.
ƒ Highlights of the quarter
The typical seasonal effect in the second quarter of the fiscal year
led to a 21.2% QoQ decline in revenues from | 408.6 crore in
Q1FY12 to | 322.1 crore in Q2FY12. EBITDA margins declined 450
bps YoY to 41% in Q2FY12. The company expects the EBITDA
margin to stabilise at 47%, going forward (our estimates: 45.8% in
FY13E). Shiv-Vani reported a 2% YoY increase in net profit from |
32.6 crore in Q2FY11 to | 33.3 crore in Q2FY12. The net profit was
below our estimates due to the interest cost of | 83.8 crore, an
increase of 5.5% YoY and 20.9% QoQ.
V a l u a t i o n
Shiv Vani’s order book has declined to | 2,300 crore (executable over
next two years) due to lack of order intake over the past few quarters.
This has reduced Shiv-Vani’s revenues visibility, going forward. However,
winning new orders from ONGC may provide an upside to the stock. The
stock is currently trading at 4.7x FY13E EPS of | 44.2. We have valued the
stock at 6x FY13E EPS, with a price target | 265.
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