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Topline growth momentum continues…
Simplex Infrastructure (SIL) reported another strong topline performance
registering 36.6% YoY growth in net sales to | 1596.4 crore. The EBITDA
margin, however, at 8.1% was lower mainly on account of the initial startup cost across few projects and forex loss of | 3.3 crore on the unhedged
debt. The company has guided for topline growth of ~15-20% for FY13E,
which we believe is achievable considering the robust order book and
execution seen in the domestic business of late.
ƒ Stellar topline growth again, margins disappoint
SIL’s topline grew 36.6% YoY to | 1596 crore in Q3FY12 vs. our estimate
of | 1340.6 crore. While domestic revenues saw a jump of ~ 40% to
| 1428 crore, international sales grew 15% to | 164 crore. The EBITDA
margin, however, declined 111 bps YoY to 8.1% as the company booked
initial start-up cost across a few projects and forex loss of | 3.3 crore on
the unhedged debt. The bottomline, consequently, at | 18 crore was
marginally lower than our estimate of | 20.4 crore.
ƒ Management guides for ~15-20% topline growth in FY13E
SIL has received orders worth ~| 5,900 crore YTD (including orders
worth | 2094 crore in January). Additionally, SIL has L1 orders worth
| 2565 crore. The company has maintained its order inflow guidance of
| 7000 crore and has guided for ~15-20% growth in FY13E, which, we
believe, is achievable considering the robust order book.
ƒ Kharagpur road project update
SIL won a BOT project for four laning of the Kharagpur–Mahulia section.
Total cost of the 127 km road project is | 940 cost, including government
grant of | 126 crore. The company currently has 100% stake in the project
and is looking for an equity partner to dilute 49%. SIL is also undertaking
EPC work of the project and has bagged | 770 crore order for the same.
V a l u a t i o n
At the CMP of | 233, the stock is trading at 8.6x FY13E EPS and 0.9x
FY13E P/BV. SIL’s strong well diversified order book, lowest equity
commitment towards subsidiary and execution capabilities make it a
strong candidate for a sharp earnings upgrade and re-rating in the
multiples when the macro environment improves. We maintain our BUY
recommendation on the stock with SOTP target price of | 331 per share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Topline growth momentum continues…
Simplex Infrastructure (SIL) reported another strong topline performance
registering 36.6% YoY growth in net sales to | 1596.4 crore. The EBITDA
margin, however, at 8.1% was lower mainly on account of the initial startup cost across few projects and forex loss of | 3.3 crore on the unhedged
debt. The company has guided for topline growth of ~15-20% for FY13E,
which we believe is achievable considering the robust order book and
execution seen in the domestic business of late.
ƒ Stellar topline growth again, margins disappoint
SIL’s topline grew 36.6% YoY to | 1596 crore in Q3FY12 vs. our estimate
of | 1340.6 crore. While domestic revenues saw a jump of ~ 40% to
| 1428 crore, international sales grew 15% to | 164 crore. The EBITDA
margin, however, declined 111 bps YoY to 8.1% as the company booked
initial start-up cost across a few projects and forex loss of | 3.3 crore on
the unhedged debt. The bottomline, consequently, at | 18 crore was
marginally lower than our estimate of | 20.4 crore.
ƒ Management guides for ~15-20% topline growth in FY13E
SIL has received orders worth ~| 5,900 crore YTD (including orders
worth | 2094 crore in January). Additionally, SIL has L1 orders worth
| 2565 crore. The company has maintained its order inflow guidance of
| 7000 crore and has guided for ~15-20% growth in FY13E, which, we
believe, is achievable considering the robust order book.
ƒ Kharagpur road project update
SIL won a BOT project for four laning of the Kharagpur–Mahulia section.
Total cost of the 127 km road project is | 940 cost, including government
grant of | 126 crore. The company currently has 100% stake in the project
and is looking for an equity partner to dilute 49%. SIL is also undertaking
EPC work of the project and has bagged | 770 crore order for the same.
V a l u a t i o n
At the CMP of | 233, the stock is trading at 8.6x FY13E EPS and 0.9x
FY13E P/BV. SIL’s strong well diversified order book, lowest equity
commitment towards subsidiary and execution capabilities make it a
strong candidate for a sharp earnings upgrade and re-rating in the
multiples when the macro environment improves. We maintain our BUY
recommendation on the stock with SOTP target price of | 331 per share.
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