Angel Broking - Sadbhav Engineering - 2QFY2014 - Buy.

[Rajesh Desai]

Dear All,

 

Forwarding you the Result Update on Sadbhav Engineering for 2QFY2014 with an Buy recommendation and a Target Price of `90 (12 months).

 

For 2QFY2014, Sadbhav Engineering (SEL) reported a mixed set of numbers.  SEL posted a disappointing set of numbers on the revenue front, owing to the onset of monsoons; however owing to tax credit of ~`18.7cr during the quarter, earnings were above our estimate. SEL has an order book of `9,241cr (4.6x trailing revenues) as of 2QFY2014, which provides good revenue visibility. Given the healthy order book (4.6x trailing revenue), we expect the company to report revenues of `2,458cr and `2,727cr for FY2014 and FY2015 respectively. We continue to maintain our Buy view on the stock with a SOTP based target price of `90, owing to robust order backlog of  `9,241cr (4.6x trailing revenues), strong balance sheet and on the expectation that the company would be able to meet the equity requirement for its under-construction/development projects through internal accruals or securitization.

 

Kindly click on the following link to view the Report.

 

Sadbhav Engineering - RU2QFY2014

 

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With best regards,
Fundamental Adivsory Desk

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Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.

 

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CA. Rajesh Desai