Please refer to important disclosures at the end of this report 1 Quarterly Highlights – Standalone Y/E March ( ` cr) 3QFY13 3QFY12 2QFY13 % chg (yoy) % chg (qoq) Net sales 1,352 1,569 1,398 (13.9) (3.3) Operating profit 129 128 119 0.7 8.4 Adjusted Net profit 12 21 13 (43.8) (5.4) Source: Company, Angel Research Simplex Infrastructures (Simplex) reported slow execution and lower profitability in 3QFY2013 due to stagnant order book and delayed payments from clients. The company has an order book of `15,064cr (2.5x trailing revenue) as of 3QFY2013. It secured orders worth`1,239cr and`4,254cr in 3QFY2013 and 9MFY2013 respectively.Slower execution, margins ahead of our estimates: On the top-line front, the company reported a decline of 13.9% yoy to `1,352cr, which was 24.7% and 21% lower than our and consensus estimate. Revenue contribution from domestic and overseas operations stood at 85% and 15%, respectively, for 9MFY2013. On the operating front, the company reported an EBITDA of`129cr, a growth of 8.9% qoq in 3QFY2013. Adjusting for the foreign exchange MTM loss of`0.6cr, the EBITDA margin stood at 9.6% and was higher than our estimate of 8.7%. The company reported an adjusted PAT of `12cr (was below our estimate of `28cr) in 3QFY2013, a decline of 43.8% yoy. This was mainly due to lower-than-expected revenue growth during the quarter. Outlook and valuation: Simplex has been performing well on the revenue front since the last four consecutive quarters and has a strong order book of `15,064cr (2.5x trailing revenue). However the Management has earlier given a guidance of 10-15% on the revenue front for FY2013 owing to the macro challenges faced by the sector. Going forward, given the current order book mix, we estimate Simplex to report a revenue and PAT CAGR of 9% and 21% respectively over FY2012-14. We maintain our Buy rating on the stock, with a target price of ` 197 per share, valuing the company at 8x FY2014E earnings. Key financials (Consolidated) Y/E March ( ` cr) FY2011 FY2012 FY2013E FY2014E Net Sales 4,808 5,983 6,002 7,114 % chg 5.6 24.5 0.3 18.5 Adj.Net Profit 125 89 70 122 % chg (2.0) (28.2) (22.0) 74.3 EBITDA (%) 10.2 8.9 9.1 9.3 FDEPS ( ` ) 25.2 18.1 14.1 24.6 P/E (x) 6.5 9.0 11.6 6.6 P/BV (x) 0.7 0.7 0.6 0.6 RoE (%) 12.1 7.8 5.6 9.2 RoCE (%) 12.3 10.7 9.2 10.7 EV/Sales (x) 0.5 0.5 0.5 0.5 EV/EBITDA (x) 4.8 5.4 5.7 5.1 OB/Sales (x) 3.1 2.6 2.8 2.6 Order Inflows 8,024 6,561 7,728 8,570 % chg 34.1 (18.2) 17.8 10.9 Source: Compa ny, Angel ResearchBUY CMP `163 Target Price `197 Investment Period 12 Months Stock Info Sector Net Debt ( `cr) 2,618 Bloomberg Code Shareholding Pattern (%) Promoters 55.0 MF / Banks / Indian Fls 21.6 FII / NRIs / OCBs 12.6 Indian Public / Others 10.8 Abs. (%) 3m 1yr 3yr Sensex 6.5 6.6 20.4 Simplex ( 14.9) ( 34.0) (62.1) 2 19,501 5,898 SINF.BO SINF@IN 806 0.7 264/160 2,823 Infrastructure Avg. Dail y Volume Market Cap ( `cr) Beta 52 Week High / Low Face Value ( `) BSE Sensex NiftyReuters Code Viral Shah 022-39357800 Ext: 6842 [email protected]Simplex Infrastructures Performance Highlights 3QFY2013 Result Update | Infrastruct ure February 18, 2013
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should makesuch investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or
other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in
the past.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, pleaserefer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited andits affiliates may have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement Simplex Infra
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)