Emkay Broking > Aban | Elecon | TRF | Infinite | TRIL | JSW Energy
Deepak Vaishnav
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Aban Offshore |
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Lower Standalone profitability drags Q2FY12 nos |
BUY
CMP: Rs436 Target Price: Rs522
n Q2FY12 EBITDA at Rs4.6bn(-17.5% yoy ) below est of Rs4.8bn dragged by lower standalone proftability (standalone EBIDTA down 58% qoq) due to lower operating days for Aban IV
n Standalone net loss of Rs0.7bn and higher consolidated depreciation & interest charges drag Q2FY12 APAT to Rs0.79bn (-15.5% qoq) -below estimates
n Lower revenues from standalone business leads to earnings downgrade for FY12E/13E by -5.3% /-7.6%. We also lower our TP to Rs522 (Rs580 earlier) to factor in earnings downgrade
n Only 2 rigs idle-see strong cash flow visibility -USD 400 mn CFO over FY11-13, leading to accelerated de-leveraging- Valuation at 5.9X FY13 EV/E & .6X P/B remain attractive-BUY
Regards,
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Ajit Motwani |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : ajit.m...@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 255 | DID : 66121255 | Mob : +919820934229 |
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Elecon Engineering |
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Leverage risk persists; Retain Hold |
HOLD
CMP: Rs69 Target Price: Rs61
n Meets expectations – (1) Revenue up 20% yoy to Rs3.4 bn led by TE div. (+22%); MHE div. (+19%) (2) EBITDA mgn up 50 bps, TE EBIT mgn fall 70 bps (3) APAT up 10% to Rs156 mn
n Order inflows at Rs2.6 bn (down 47% qoq) – YTD secured 52% of FY12E target. Order book healthy at Rs14.4 bn
n Debt remains high at 1.3X. EEL in high capex mode despite strained cash flow position – plans to spend Rs1-1.2 bn in FY12E (equal to past 2 years capex spends)
n We maintain our earnings estimates with H2FY12E asking rate undemanding at 14% yoy, but risks to earnings remain. Retain HOLD rating with price target of Rs61 per share
Regards,
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Pritesh Chheda |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email: pritesh...@emkayglobal.com |
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Board No. : +91- 22- 6612 1212 | Extn. : 273 | DID : +91-22- 6612 1273 | Mob : +91 98208 07241 |
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Prerna Jhavar |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : prerna...@emkayglobal.com |
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Board No. : +91-22-6612 1212 | Extn. : 337 | DID : 6612 1337 | Mob : +91981935 0593 | |
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TRF Limited |
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Q2FY12 Conference Call Transcript |
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Emkay Global Research |
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Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : emkayglob...@emkay.co.in |
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Paragon Center, H -13-16, 1st Floor, Opp. Century Mills, Pandurang Budhkar Marg, Worli, Mumbai - 400 013 Fax : +91 22-66610307 |
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Infinite Computer Solutions |
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High client concentration comes to haunt |
BUY
CMP: Rs91 Target Price: Rs120
n Infinite reported revenues of US$ 56.2 mn(-4% QoQ), missing expectations driven by ramp down in a key top client. Mgns were flat QoQ (est of +80 bpsQoQ) aided by weak currency
n Pfts at Rs 307 mn bettered est aided by higher other income. Net HC reduced for the 2nd qtr in a row(-146 QoQ) with revenues from top 5/10 clients declining by ~7.5/3.2% QoQ
n Co has cut it’s US$ revenue guidance to US$ 220 mn (+14% YoY) V/s 26.5-29% YoY growth outlook higher on account of rampdowns in a key telecom client account
n Cut FY12/13E EPS by ~8.5/15% to ~Rs 26/28 driven by lower US$ rev assumptions, albeit aided by lower currency resets. Valuations inexpensive at <4x FY12 P/E. BUY, TP Rs 120
Regards,
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Manik Taneja |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : manik....@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 253 | DID : 66121253 | Mob : +919833934924 | |
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Transformers & Rectifiers |
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Low margins orders impact performance |
BUY
CMP: Rs217 Target Price: Rs293
n TRIL’s Q2 performance (rev - Rs1.4bn, up 23% yoy, PAT - Rs21mn, down 79% yoy) is lower than est due to low margin orders (2Q EBITDA margins at 3.9% vs 15.1% yoy) execution.
n Has received Rs2.2bn, 765kv order (20 transformers) from PGCIL (will help in scaling up the range). Few orders including 765kv orders are low margin orders- to impact numbers in mid-term - cut FY12/13E EPS by 37% and 32%.
n But we maintain that TRIL is quickly entering into big league of transformer mfrs (CG, ABB, Areva and Siemens) with a capacity to deliver across ranges - should lead to re-rating.
n Some pain left on lower entry prices and ambiguity on sector fundamentals but TRIL better placed with exports and special transformers/rectifiers. Expect gradual re-rating; Retain Buy
Regards,
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Amit Golchha |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : amit.g...@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 408 | DID : 66242408 | Mob : +919833357365 | |
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JSW Energy |
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Reported Loss; Maintain Reduce |
REDUCE
CMP: Rs50 Target Price: Rs46
n 2Q12 loss after tax of Rs1.1bn is attributed to forex loss of Rs778mn (buyers credit on imported coal) and poor operational performance – due to Barmer and Vijayanagar.
n Barmer plant did not operate in 2Q leading to huge under-recoveries (Rs590mn) & lower PLF (72%/74%) at Vijayanagar Ratnagiri (due to lower demand) added to the problems.
n Avg realizations stood at Rs4.2/unit, significantly lower qoq and yoy at Rs4.7 and Rs4.6/unit. Fuel cost further increased to Rs3.3/unit from Rs2.9/unit qoq and Rs2.8/unit yoy
n Huge cut in FY12E/FY13E earnings by 60%/26% on no profit from Barmer, higher fuel cost and lower PLF/merchant tariffs. Maintain Reduce; risky business model - open from both sides (fuel and off-take). Cut target price to Rs46/share