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R e d u c e d r e v e n u e s , e n l a r g e d ma r g i n s…
BGR Energy (BGR) delivered an in line set of numbers for Q3FY12.
Reported revenues stood at | 803 crore (down 36% YoY) vs. our
expectation of | 1015 crore. Superior EBITDA margins at 16.4% were
significantly above our estimates (I-direct estimate: 11.5%), due to higher
execution of BOP contracts. Consequently, PAT came in at | 55 crore,
down 37% YoY owing to a stretched working capital cycle and higher
interest costs (up 50% QoQ). However, a reasonable order book position
at | 8200 crore (excluding L1 of NTPC 4*800MW order), provides cushion
to growth in FY13E/14E given a low base in FY12. We estimate the topline
will increase by 27% for FY13E over FY12E to | 4368 crore.
Decent order book, amplified margins; but execution concerns stay…
With order inflows of | 1700 crore in Q3FY12, the total order book stands
at | 8200 crore (implying a book to bill of 2.2x), thereby providing revenue
visibility for FY13E. The order book will further get amplified by another
| 3,000 crore as the recent L1 in NTPC 4X800 MW TG order, is expected
to be booked in Q1FY13. The higher than anticipated EBITDA margin at
16.4% resulted from execution of high margin BOP contracts (60% of
total revenues). However, going forward, margins are expected to
moderate to 11.5% in FY13E on higher execution of EPC contracts. The
company has guided for full year revenues in FY12 at | 3,400 crore
(implying revenue booking of | 1100 crore for Q4FY12E). We expect the
topline and PAT to be at | 4368 crore and | 230 crore for FY13E, a 27%
and 7% YoY growth, respectively.
V a l u a t i o n
The steep correction in stock price has already factored in concerns like
weak macro, stretched working capital & higher interest rates. We expect
execution to pick up in FY13E/FY14E, given the late order flows in FY12.
We expect a turning of cyclical factors like reduction in debtors, release of
retention money and decline in rates to aid PAT growth in FY13/FY14. We
have valued the stock at 8x FY13E EPS and arrive at a TP of | 256.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
CLICK here for PDF post link
R e d u c e d r e v e n u e s , e n l a r g e d ma r g i n s…
BGR Energy (BGR) delivered an in line set of numbers for Q3FY12.
Reported revenues stood at | 803 crore (down 36% YoY) vs. our
expectation of | 1015 crore. Superior EBITDA margins at 16.4% were
significantly above our estimates (I-direct estimate: 11.5%), due to higher
execution of BOP contracts. Consequently, PAT came in at | 55 crore,
down 37% YoY owing to a stretched working capital cycle and higher
interest costs (up 50% QoQ). However, a reasonable order book position
at | 8200 crore (excluding L1 of NTPC 4*800MW order), provides cushion
to growth in FY13E/14E given a low base in FY12. We estimate the topline
will increase by 27% for FY13E over FY12E to | 4368 crore.
Decent order book, amplified margins; but execution concerns stay…
With order inflows of | 1700 crore in Q3FY12, the total order book stands
at | 8200 crore (implying a book to bill of 2.2x), thereby providing revenue
visibility for FY13E. The order book will further get amplified by another
| 3,000 crore as the recent L1 in NTPC 4X800 MW TG order, is expected
to be booked in Q1FY13. The higher than anticipated EBITDA margin at
16.4% resulted from execution of high margin BOP contracts (60% of
total revenues). However, going forward, margins are expected to
moderate to 11.5% in FY13E on higher execution of EPC contracts. The
company has guided for full year revenues in FY12 at | 3,400 crore
(implying revenue booking of | 1100 crore for Q4FY12E). We expect the
topline and PAT to be at | 4368 crore and | 230 crore for FY13E, a 27%
and 7% YoY growth, respectively.
V a l u a t i o n
The steep correction in stock price has already factored in concerns like
weak macro, stretched working capital & higher interest rates. We expect
execution to pick up in FY13E/FY14E, given the late order flows in FY12.
We expect a turning of cyclical factors like reduction in debtors, release of
retention money and decline in rates to aid PAT growth in FY13/FY14. We
have valued the stock at 8x FY13E EPS and arrive at a TP of | 256.
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