Share Review - Sadbhav Engineering

For 3Q FY2012, Sadbhav Engineering (SEL) reported a strong performance,
marginally ahead of our expectations (highest on the street) and way ahead of
street estimates.

The SEL reported robust 52.0% y o y growth on the top-line front to
Rs.723.7 cr, in-line with our estimate of Rs.714.3 cr (consensus estimate of Rs.630 cr).
SEL has been able to maintain a sturdy execution pace for captive road BOT
projects since the past few quarters, leading to robust revenue growth. On the
margin front, the company posted EBITDAM of 10.4%, marginally lower than our
estimate of 10.7%. The only surprise came in the interest cost, as it stood at
Rs.10.6 cr, registering a decline of 31.3% on a sequential basis and lower than our
estimate of Rs.16.8 cr.

On the earnings front, SEL reported 58.1% growth y o y to Rs.41.7 cr, higher than our expectation of Rs.38.9 cr (consensus estimate of Rs.31 cr) on account of higher top-line growth and lower interest cost.

 We maintain our Buy view on the stock with a target price of Rs.150.

Share Review by Angel Broking

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