For 4Q FY 2012, Nagarjuna Construction Company (NCC) posted better than expected numbers on the revenue and earnings front.
However, the company disappointed on the EBITDAM level. The current outstanding order book of NCC stands at Rs. 20,196 cr, with order inflow of Rs.10,116 cr (including captive power order worth Rs.5,186 cr) for FY 2012.
We maintain our Buy view on the stock.
Earnings pulled down by poor EBITDAM and higher interest cost, despite higher
revenue: For 4Q FY 2012, on the top-line front, NCC reported a jump of 21.0 % y o y to Rs.1,755 cr, which was higher than our expectation of Rs.1,429 cr.
On the EBITDAM front, the company’s margin was disappointing at 5.8 %, a dip of 3.2% y o y and lower than our estimate of 7.4 %.
As per the company, provisions, time and cost overruns & higher input costs resulted in lower EBITDAM for the quarter. Interest cost came in at Rs.98 cr, registering a y o y jump of 19.9 % but a decline of 8.1 % on a sequential basis.
On the bottom-line level, NCC reported a y o y decline of 69.7 % to Rs.11 cr, almost in-line with our estimate of Rs.10 cr despite posting higher revenue owing to lower EBITDAM and higher interest cost.
Outlook & valuation:
NCC’s performance on the revenue front in 4QFY2012 was a positive surprise, but poor EBITDAM and higher interest cost continue to affect the company’s earnings in a negative way.
Thus, we are revising our estimates downwards for FY 2013 and FY 2014, respectively, mainly to factor in
poor performance at the EBITDAM level and as we do not expect the company to get respite from its high debt and stretched working capital in the near future.
However, after a steep correction (46.2 %) in the past 3 months, the stock is currently trading at low valuation of 0.3x FY2014E P/BV (standalone) and, hence,
We maintain our Buy view on the stock with an SOTP. Target Price Rs..41
Investment Period 12 Months
Nitin Arora
022-39357800 Ext: 6842
nitin.arora@angelbroking.com
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
However, the company disappointed on the EBITDAM level. The current outstanding order book of NCC stands at Rs. 20,196 cr, with order inflow of Rs.10,116 cr (including captive power order worth Rs.5,186 cr) for FY 2012.
We maintain our Buy view on the stock.
Earnings pulled down by poor EBITDAM and higher interest cost, despite higher
revenue: For 4Q FY 2012, on the top-line front, NCC reported a jump of 21.0 % y o y to Rs.1,755 cr, which was higher than our expectation of Rs.1,429 cr.
On the EBITDAM front, the company’s margin was disappointing at 5.8 %, a dip of 3.2% y o y and lower than our estimate of 7.4 %.
As per the company, provisions, time and cost overruns & higher input costs resulted in lower EBITDAM for the quarter. Interest cost came in at Rs.98 cr, registering a y o y jump of 19.9 % but a decline of 8.1 % on a sequential basis.
On the bottom-line level, NCC reported a y o y decline of 69.7 % to Rs.11 cr, almost in-line with our estimate of Rs.10 cr despite posting higher revenue owing to lower EBITDAM and higher interest cost.
Outlook & valuation:
NCC’s performance on the revenue front in 4QFY2012 was a positive surprise, but poor EBITDAM and higher interest cost continue to affect the company’s earnings in a negative way.
Thus, we are revising our estimates downwards for FY 2013 and FY 2014, respectively, mainly to factor in
poor performance at the EBITDAM level and as we do not expect the company to get respite from its high debt and stretched working capital in the near future.
However, after a steep correction (46.2 %) in the past 3 months, the stock is currently trading at low valuation of 0.3x FY2014E P/BV (standalone) and, hence,
We maintain our Buy view on the stock with an SOTP. Target Price Rs..41
Investment Period 12 Months
Nitin Arora
022-39357800 Ext: 6842
nitin.arora@angelbroking.com
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
No comments:
Post a Comment