Jyoti Structures (JSL) announced its 3Q FY 2012 results, which were lower than our
and street estimates. The top line posted modest growth of 6.5% y o y to Rs. 587.2 cr
(Rs. 551.3 cr), lower by 10 % from our estimate of Rs. 652.7 cr.
On the EBITDA front, margin compressed by 1.3% y o y to 10.1%, which was along expected lines
(est. 10.5%). The margin dip was primarily due to higher sub-contracting
expenses, which shot up by 8.8% y o y to 28.3%, as a proportion to sales.
Profitability was further impacted by high interest expenses, which soared by
46.5% y o y to Rs.34.7 cr. This resulted into PAT plunging by 44.1% y o y to Rs.13.8 cr
(Rs.24.7 cr) against our (below street) estimates of Rs. 20.8 cr.
At CMP, the stock trades cheaply at 3.5x and 4.1x, FY2012E and FY2013E, EPS
respectively. The pessimism, viz. high interest expenses, low profitability and
elongated working capital cycle, has clearly factored in the stock’s performance.
We would like to get more insights from the earnings conference call, post which
we will revise our estimates and recommendation. Meanwhile, we maintain our
Buy recommendation on the stock with a target price of Rs.61.
Review by Angel Broking
6th Floor, Ackruti Star, Central Road,MIDC
Andheri (E) , Mumbai-93
Main : (91-22) 3935 7600 Extn : 6956
Website : www.angelbroking.com
and street estimates. The top line posted modest growth of 6.5% y o y to Rs. 587.2 cr
(Rs. 551.3 cr), lower by 10 % from our estimate of Rs. 652.7 cr.
On the EBITDA front, margin compressed by 1.3% y o y to 10.1%, which was along expected lines
(est. 10.5%). The margin dip was primarily due to higher sub-contracting
expenses, which shot up by 8.8% y o y to 28.3%, as a proportion to sales.
Profitability was further impacted by high interest expenses, which soared by
46.5% y o y to Rs.34.7 cr. This resulted into PAT plunging by 44.1% y o y to Rs.13.8 cr
(Rs.24.7 cr) against our (below street) estimates of Rs. 20.8 cr.
At CMP, the stock trades cheaply at 3.5x and 4.1x, FY2012E and FY2013E, EPS
respectively. The pessimism, viz. high interest expenses, low profitability and
elongated working capital cycle, has clearly factored in the stock’s performance.
We would like to get more insights from the earnings conference call, post which
we will revise our estimates and recommendation. Meanwhile, we maintain our
Buy recommendation on the stock with a target price of Rs.61.
Review by Angel Broking
6th Floor, Ackruti Star, Central Road,MIDC
Andheri (E) , Mumbai-93
Main : (91-22) 3935 7600 Extn : 6956
Website : www.angelbroking.com
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